IMF agreement outlines major fiscal and monetary reforms

The government has reached an agreement with the International Monetary Fund (IMF) to address a significant fiscal and external crisis. The diagnostic identifies a projected fiscal deficit of 11% of GDP for 2025, public debt exceeding 80% of GDP, declining gas production, and depleted international reserves.

Key components of the agreement include a deep fiscal adjustment equivalent to approximately 8.5% of GDP between 2026 and 2029. The goal is to eliminate the primary deficit by the end of the program and reduce the global deficit to 3.5% of GDP by 2029. Additionally, fuel subsidies are set to expire; while prices will remain frozen through 2026, costs must reach recovery levels by January 2027.

The agreement also mandates a transition toward a flexible exchange rate determined by the market, with limited interventions from the Central Bank. Furthermore, the Central Bank will lose its historical function of financing the state, as the program establishes a zero net new credit criterion to the non-financial public sector to strengthen monetary and fiscal policy separation.