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ECONOMY | 28-03-2021 21:53

Fernández: IMF debt is 'unpayable' and terms must be renegotiated

President Alberto Fernández said on Sunday that the Argentina's debt with the International Monetary Fund is "unpayable" in its original form.

President Alberto Fernández said on Sunday that the Argentina's debt with the International Monetary Fund is "unpayable" in its original form.

The Peronist leader has sought to renegotiate several multi-billion dollar debts ever since taking office in December 2019. Argentina has been in recession since mid-2018. 

"The debt we inherited with the current terms is unpayable, and what we're looking at is how to negotiate with the Fund to obtain the best advantages," Fernández told the Del Plata radio station.

Last week, Economy Minister Martín Guzmán travelled to Washington to meet IMF chiefs.

At the end of the meeting, the IMF said the two sides had reached "a common understanding of the need for macroeconomic sustainability and for safeguarding the post-Covid recovery underway."

Fernández said Argentina must pay US$3.5 billion this year, US$18 billion in 2022 and US$19 billion in 2023.

"What chance do we have of paying US$18 billion next year? None," he said.

"It's already hard to see us paying US$3.5 billion this year, and another US$2.5 billion to the Paris Club," he added referring to a debt with the group of creditor countries that tries to find sustainable solutions for struggling debtor nations.

Argentina has received US$44 billion of a US$57-billion loan from the IMF arranged under former president Mauricio Macri.

After taking office, Fernández refused to accept the rest of the loan.

Last year, the government managed to renegotiate another US$66-billion in private debt that was worth 54.8 cents on the dollar.

"The idea is not to not pay but rather to obtain an agreement that will allow us to sustain our economic plan of development and growth, and without forgetting the 40 percent of the population below the poverty line," Fernández told the C5N television channel on Saturday, saying that he wanted a repayment schedule that would go beyond 10 years.

He praised the IMF for having said that debt must be sustainable, adding that "this means that countries need to be able to pay their debt without postponing their development."

Argentina's economy shrunk 9.9 percent in 2020 as the coronavirus pandemic hit hard. Inflation was 36.1 percent, which was at least lower than the 53.8 percent of 2019. Prices are expected to rise 48 percent this year – the second-highest forecast rate in the world.

– TIMES/AFP

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