Inflation has hit 25 percent, the Argentine peso has lost about 20 percent of its value against the US dollar, and the federal budget is in deficit. The government hopes the IMF loan will get the country back on track.
Argentina and the International Monetary Fund (IMF) on Thursday agreed on a $50 billion (€42 billion) stand-by loan in a bid to bolster the country's public finances and aid its struggling economy.
South America's third-largest economy intends to use the loan, which still requires the IMF executive board's approval, to try to balance the budget by 2020 and reduce inflation to single-digits by 2021.
Argentine President Mauricio Macri said in May that he would seek the loan, warning of a recession if the government were not able to get the IMF's help. The economy has been languishing amid rapidly rising consumer prices — annual inflation has hit an estimated 25 percent — and after the national currency, the peso, lost around 20 percent of its value against the US dollar.
IMF Director Christine Lagarde welcomed the deal and said both sides would work together to make sure the loan and the associated economic reforms "benefit of all Argentines."
Tens of thousands of Argentinians took the street to protest Macri's intention to request the loan. Many Argentinians blame IMF-imposed austerity measures for prolonging a severe economic crisis in the early 2000s.
Argentinian Finance Minister Nicolas Dujovne said he expected the funds from the loan to be available after an IMF executive board meeting on June 20.
The government is also set to propose strengthening the autonomy of the Argentine central bank as part of its reform drive.
The country has also agreed to separate loans with the Inter-American Development Bank, the World Bank and the CAP development bank for a total of $5.65 billion in additional financing.
amp/bw (AP, dpa, AFP, Reuters)