Argentina Project

1. Understandably, last month's peso crisis shook confidence in #Argentina and battered President @mauriciomacri's public image, down from 45% to 36% in the May @Poliarquia_ poll.

2. At the time, I questioned the conventional wisdom that an #IMF rescue would further erode Macri's standing, despite Argentines' distaste for the IMF. The ultimate impact will be clearer after next year's election in #Argentina, but for #Cambiemos, the signs are encouraging.

3. After the peso stabilized, @Poliarquia_ saw Macri's approval rating quickly improve, up to 40% from 36%. Now, the details of Thursday's $50 billion, three-year #IMF agreement should further boost confidence in #Argentina's embattled government.

4. The #IMF and #Argentina's authorities bent over backwards to head off Peronist accusations of heartless austerity. For this year, the government's 2.7% of GDP deficit target (down from a 3.2% target before the capital flight that led to the bailout) is unchanged.

5. True, the subsequent deficit reduction will be "very challenging," according to an Itaú research note: to 1.3% of GDP next year, down from the 2.2% target. But the savings will not come from #Argentina's social programs, which will face no budget cuts for at least three years.

6. The #IMF plan, @Lagarde said, is "owned and designed" by #Argentina, and will "protect the most vulnerable in the population" while looking out "for the benefit of all Argentines." http://www.imf.org/en/News/Articles/2018/06/07/pr18216-argentina-imf-reaches-staff-level-agreement-with-argentina …

7. Moreover, the #IMF bailout was a lullaby to jittery investors. The sum (including an additional $5.6 billion from @WorldBank, @the_IDB and @AgendaCAF) exceeded expectations, and the program, including its fiscal targets, were "very well designed," @Citi analysts concluded.