By Eliana Raszewski and Cassandra Garrison
BUENOS AIRES (Reuters) - Argentina has requested several modifications to its $57 billion International Monetary Fund financing deal, including that the lender support a tougher primary fiscal surplus target to help hammer home the country's commitment to trimming back its debt.
Argentina requested an expansion of the end-September primary fiscal goal to a more ambitious 70 billion pesos, up from 60 billion pesos, the IMF said in a news release announcing its approval of the fourth review of the deal and a disbursement of $5.4 billion.
The IMF said Argentina had asked for the tougher goal "as a signal of their priority of ensuring that Argentina's debt-to-GDP ratio is placed decisively on a downward path."
Argentina's fiscal tightening, part of the deal with the IMF to trim back excessive debt loads, has come under scrutiny ahead of presidential elections this year and as social pressures have mounted with rising unemployment and poverty.
Moody's last week downgraded Argentina's outlook to negative from stable, in part because the "risk is rising of changes or potentially reversals to a fiscal consolidation."
Argentina also asked the IMF to "support an expansion of the social spending floor" to incorporate assistance programs targeting adults and low-income working mothers.
The IMF estimated inflation will be 40.2% in 2019, up from its previous estimate of 30.5%. The Fund also predicted Argentina's economy will shrink 1.3% in 2019, more than its previous estimate of 1.2%.
Argentina will end 2019 with a primary fiscal deficit of 0.3%, within the goal attached to the deal, the IMF estimated.
The fund also recommended in its review that Argentina look for opportunities to increase rollover rates and lengthen the average maturity for government-backed bonds.
After President Mauricio Macri negotiated the biggest loan in IMF history last year amid rampant inflation and a run on the peso currency, he introduced austerity measures which included unpopular spending cuts to reach the agreed fiscal targets.