The International Monetary Fund’s executive board approved Argentina’s latest program review on Wednesday and authorised a disbursement of roughly $1 billion, a notable vote of confidence in President Javier Milei’s economic stabilisation effort despite Argentina’s failure to meet a key program target on reserve accumulation.
Inside the same review, the Fund raised its 2026 inflation projection for Argentina sharply, to 30.4 percent from an earlier 16.4 percent, and trimmed its growth forecast to 3.5 percent. IMF staff said the upward inflation revision reflected the spill-through of late-2025 peso depreciation and the impact of fuel-price liberalisation; the growth markdown reflected weaker-than-expected first-quarter activity outside agriculture.
Milei’s government has run a primary surplus for fifteen consecutive months, an achievement the Fund described as “without recent precedent in Argentine fiscal history.” Public sector employment is down roughly 12 percent from the December 2023 baseline, and the central bank’s liability stock to the Treasury has shrunk substantially as legacy interest-bearing notes have been refinanced into Treasury paper.
But the stabilisation has come at a visible social cost. Hundreds of protesters marched in Buenos Aires last week against cuts to the healthcare system, and Milei’s personal approval rating has slipped to around 35 percent in AtlasIntel polling, down from 47 percent at the same point a year ago. Real wages, after rising for three quarters, have begun to drift sideways since February.
The deregulation agenda has continued to advance. Federico Sturzenegger, the minister for deregulation and state transformation, has pushed through additional liberalisations in telecoms, road haulage and aviation slot allocation since the start of the year, and the privatisations of two state-owned commercial entities are scheduled for the third quarter.
On the external accounts, Argentine bond yields have continued to fall but remain elevated relative to other emerging-market sovereigns, reflecting investor doubts about reserve accumulation in particular. The country’s ten-year hard-currency bond is trading at a yield premium of roughly 7.5 percentage points to US Treasuries, well above the 3-4 point spreads typical for stable emerging markets.
Inside the IMF, the Argentina program has become an institutional priority. Fund officials privately describe it as “the single most important country case on the desk this year” and say that, if it holds together, it would mark the first sustained Argentine stabilisation since the early 1990s. Milei’s government has tied its midterm political fortunes to that outcome, with congressional elections due in October.