×
  • World - South America
  • Updated: February 20, 2020

IMF: Argentina's Debt Not Sustainable

IMF: Argentina's Debt Not Sustainable

Argentina’s debt is not sustainable, the IMF concluded Wednesday at the end of a week-long visit, urging the government to generate funds from private investors to address the issue.

President Alberto Fernandez’s administration hopes to renegotiate $195 billion of its $311 billion foreign debt, including a deeply unpopular $57 billion bailout loan from the Washington-based International Monetary Fund in 2018.

Assuming power two months ago, Fernandez refused the final $13 billion disbursements of the loan, leaving Argentina’s exposure at $44 billion.

“The Argentine authorities are moving to address the difficult economic and social situation facing the country,” an IMF statement released after the meetings said Wednesday.

“They have implemented a set of policies to address the rise in poverty, while also taking steps to stabilize the economy.”

READ ALSO: Somali Military Bases Attacked By Al-Shabaab Militant Forces

It added however that further efforts were needed to reduce inflation.

Argentina’s ability to service its debt deteriorated markedly compared to the IMF’s last analysis in July 2019, the fund said, when the amount owed was manageable.

Since then, the peso had depreciated by over 40 percent, international reserves declined by about $20 billion, and real GDP contracted more than previously projected.

Public debt rose to nearly 90 percent at the end of 2019 as a result.

“In light of these developments… IMF staff now assesses Argentina’s debt to be unsustainable,” the statement released after the talks said.

“A definitive debt operation — yielding a meaningful contribution from private creditors — is required to help restore debt sustainability with high probability,” it said.

It said the IMF would “continue to engage closely” with Buenos Aires amid further discussions on the government’s economic plans and policies.

As part of the process, IMF chief Kristalina Georgieva will meet with Economy Minister Martin Guzman to discuss “the next steps of IMF’s engagement with Argentina” on the sidelines of the upcoming G20 Finance Ministers meeting, it said.

AFP

Related Topics

Join our Telegram platform to get news update Join Now

0 Comment(s)

See this post in...

Notice

We have selected third parties to use cookies for technical purposes as specified in the Cookie Policy. Use the “Accept All” button to consent or “Customize” button to set your cookie tracking settings