Argentina First Inclusive Growth Programmatic DPF

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The development objectives of First Inclusive Growth Programmatic Development Policy Financing Project for Argentina are the following: (i) strengthening the foundations for private sector-led growth; and (ii) strengthening the social safety net and enhancing fiscal equity. Stabilizing the economy and restoring investor confidence is a primary concern of the Government. The DPF series complements and reinforces these stabilization efforts by supporting measures that tackle distortions and level the playing field for private sector-led growth, which are important measures to help sustain and increase potential growth. To support private sector-led growth, the Government is addressing policy distortions that act as barriers to private sector-led growth. Productivity growth in Argentina has been very low over recent decades in an economic setting marked by macroeconomic and policy volatility. Continuing to build an inclusive social safety net and enhancing fiscal equity are an essential element of the program. The DPF series supports measures that combine growth and equity considerations with fiscal sustainability aspects. Given Argentina’s federal system, it is also critical that actions at the federal level be accompanied by well-designed actions at the provincial level.This DPF series has been designed to adapt to changing socio-economic circumstances. Five principles guided the design of the DPF series. First, the program is focused on policy actions that are priorities of the Government and where the World Bank has a comparative advantage in terms of existing analytical work and an established engagement to underpin policy dialogue with the authorities. Second, selected prior actions are expected to significantly strengthen the foundations for private sector-led growth or the social safety net, and contribute to a more inclusive fiscal policy, and therefore reinforcing the stabilization efforts by the Government. Third, the program complements the support of other development partners. Fourth, the design of the DPF series incorporates lessons learnt from earlier operations in Argentina as well as the World Bank’s global experience on budget support operations. Fifth, should economic conditions deteriorate more than is expected in the baseline, the program is designed with the flexibility to adjust to support a deeper than expected fiscal consolidation and the mitigation of adverse impacts on the most vulnerable