IMF Reaches Deal on $20 Billion Bailout With Argentina

The decision is welcome news to Argentinian President Javier Milei as he continues his reformation of the indebted South American nation.

Argentinian President Javier Milei speaks after receiving this year's Roepke Prize for Civil Society of the Liberal Institute at the Congress centre in Kloten, Switzerland, on Jan. 24, 2025. Ennio Leanza/Keystone via AP

The International Monetary Fund (IMF) stated that it reached a preliminary agreement with Argentina for a $20 billion bailout on April 8.

In a statement, released on its website, the IMF stated: “The agreement builds on the authorities’ impressive early progress in stabilizing the economy, underpinned by a strong fiscal anchor, that is delivering rapid disinflation and a recovery in activity and social indicators.

“The program supports the next phase of Argentina’s homegrown stabilization and reform agenda aimed at entrenching macroeconomic stability, strengthening external sustainability, and unlocking strong and more sustainable growth, while also managing the more challenging global backdrop.”

Argentinian President Javier Milei, who has cut inflation and stabilized Argentina’s troubled economy with a free-market austerity agenda, posted the IMF’s statement on social media platform X along with a photograph of him embracing Economy Minister Luis Caputo.

He captioned the picture “VAVOS CARAJO!”—apparently misspelling the word “Vamos!”—in a statement that loosely translates into English as “Let’s go, damn it!”

Milei’s policies have reversed the borrowing of previous governments, which had left Argentina with a reputation for defaulting on its debts.

Buenos Aires has received more IMF bailouts than any other capital, racking up 22 IMF loans since 1958, leaving the nation owing the fund more than $40 billion, which it agreed to refinance in 2022.

Most IMF funds sent to the country have previously been used to repay the organization itself, giving it a questionable reputation among Argentines, with many blaming the lender for the country’s economic issues, both present and past.

The funds come at a critical time for South America’s second-biggest economy, as pressure had been mounting on Argentina’s depleting foreign exchange reserves as the government tightened rules on money-printing and decimated its supply of U.S. dollars to prop up the peso, which is pegged to the dollar.

Fears had been mounting that if the government had failed to secure an IMF loan, Milei’s austerity measures would be forced off-track and leave the nation, once again, unable to cover its huge debts or pay its import bills.

But the injection of money gives Milei a chance of easing some of the country’s strict foreign exchange controls, which have been in place for the past six years, putting off investors and preventing companies from sending profits abroad.

A former TV personality and self-styled “anarcho-capitalist,” Milei, came to power on a promise to cut Argentina’s bureaucracy, halt spiraling inflation, open the economy to international markets, and woo foreign investors.

During his campaign, he frequently posed with a chainsaw to illustrate his commitment to cuts.

Then-presidential candidate Javier Milei of La Libertad Avanza lifts a chainsaw during a campaign rally in Buenos Aires, Argentina, on Sept. 25, 2023. Tomas Cuesta/Getty Images

When Milei took power, he began by firing tens of thousands of state employees, dissolving or downgrading a dozen ministries, slashing inflation adjustments for pensions, freezing public works projects, lifting price controls, and reducing subsidies.

Critics have said that the poor have paid the highest price during this austerity, with major labor unions frequently protesting and calling for strikes.

Official figures released at the start of this month revealed that poverty levels had dramatically fallen in the country.

Inflation, too, has decreased, hitting a five-year low in January, all of which may have contributed to Milei’s maintaining solid approval ratings, according to polling by the Americas Society/Council of the Americas.

The Associated Press and Reuters contributed to this report.