IDB Supports Fiscal and Regulatory Reforms in Argentina with $1.2 Billion in Financing

WASHINGTON — The Inter-American Development Bank (IDB) approved two loans for Argentina totaling $1.2 billion that will advance critical reforms to strengthen fiscal sustainability, improve the business climate, and boost competitiveness under the Bank’s new 2025-2028 Country Strategy. 

The first loan, for $800 million, is the second in a series of two programmatic policy-based loans (PBLs). It aims to support tax reforms that enhance the efficiency and equity of the tax system, reducing distortionary taxes and eliminating exemptions and deductions to improve the country’s capacity to collect revenue. The loan also backs measures that reduce the cost of tax compliance by simplifying filing processes for value-added and personal income taxes.   

The financing will also support reforms to make public spending more efficient, including more precise targeting of subsidies for public services to improve the efficiency of the energy and water sectors. Other measures aim to improve the targeting and efficiency of social-assistance programs, increase budget transparency, and establish more efficient intergovernmental fiscal relations. 

The second loan, for $400 million, is part of another series of programmatic PBLs. It will support key reforms to reduce regulatory burdens, increase private-sector participation in the economy, and streamline foreign-trade operations.  

Reforms include the repeal or amendment of 700 outdated regulations and the creation of a digital platform for reporting bureaucratic obstacles that is expected to contain more than 12,000 reports by 2027.

The reforms focusing on the business environment will benefit approximately 500,000 businesses across Argentina by lowering compliance costs and opening markets previously dominated by state-owned enterprises. They will also enhance efficiency for about 24,000 importers and 9,500 exporters through faster and more transparent trade procedures.  

The newly approved loans are part of $10 billion in IDB financing assistance for Argentina that was announced in April, to be apportioned over the next three years under the Bank’s 2025-2028 Country Strategy. The financing is aligned with ongoing support from the International Monetary Fund and the World Bank and reinforces the country’s commitment to fiscal sustainability and structural transformation. 

Both IDB loans have a 20-year maturity, a 5.5-year grace period, and an interest rate based on the Secured Overnight Financing Rate (SOFR).