Wednesday, May 29, 2024

ARGENTINA | 19-11-2019 16:18

IMF waits for 'sustainable' plan as Fernández faces debt dilemma

Director General Kristalina Georgieva continues to articulate optimism about working together with Argentina's incoming government, but she admits she'd "like to know more" about its plans.

The renegotiation of Argentina's external debt will be a principal challenge for president-elect Alberto Fernaández when he takes office on December 10. 

It's problematic on two fronts: first, the external creditors, who expect a reduction in the amount of money they ow, rather than a default. Second, the International Monetary Fund (IMF), who in 2018 awarded Argentina the largest loan in its history for US$57 billion. The remaining payments are on "standby" and now await the new government to resume negotiations. 

Kristalina Georgieva, the new IMF chief, said Tuesday she anticipated seeing a 'sustainable' economic plan from the Frente de Todos leader. She recognised that it would be necessary to focus "strong attention on social protection" due to the increase in poverty during the presidency of Mauricio Macri, though she emphasi"ed the importance of "fiscal viability' in Argentina. 

"We would like to know how the incoming government is thinking. We recognise poverty has worsened, so whatever plan the government implements should consider the impact it would have on the most vulnerable," she said Tuesday during an interview with Bloomberg. 

She also mentioned the IMF was in conversation with the World Bank and the InterAmerican Development Bank to collaborate on how to support a plan that would aid social protection. 

"The government has to find a way to live with the budgetary restrictions that exist. And to do that it needs to continue working in the areas in which public spending isn't generating good results for the country," she said. "Obviously, every country should determine on its own how to do that and figure out where it should be more careful with policies to attract investment and aid growth." 

"We are very open to having a conversation around these parameters, the social responsibility of the government that made promises to the people, the fiscal viability to achieve these promises, and the sustainability to hopefully return to markets," the director general added. 


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