Wednesday, July 17, 2024

ECONOMY | 25-01-2022 15:32

IMF aims for progress on Argentina debt deal in 'next days'

Senior IMF official hopeful progress will be made in talks over new debt deal for Argentina in the coming days, but warns programme must be "sound and credible."

The International Monetary Fund hopes to make "more progress" shortly in talks on a new financial aid programme for Argentina, a senior Fund official said Tuesday.

"We are working very closely with the Argentina authorities to come up with a programme... and we hope we will make even more progress in the next days," the IMFs newly installed number two Gita Gopinath told reporters.

Argentina has received US$44 billion of the US$57-billion loan approved in 2018, which the lender itself said last month had failed to achieve its objectives of restoring confidence in the country's fiscal viability and fostering economic growth.

The Washington-based crisis lender for months has been in talks with Buenos Aires which is seeking to restructure the payment plan, that calls for payments of US$19 billion and US$20 billion due in 2022 and 2023.

But the bar for a new programme is high given the government's repeated cycles of borrowing and default.

Gopinath said helping the country overcome its difficulties "will require a programme that is sound and credible."

The government of President Alberto Fernández refused to accept the last US$13 billion of the IMF's biggest-ever loan, agreed by his conservative predecessor Mauricio Macri.

Fernández is seeking a deal that will reduce Argentina's fiscal deficit through economic growth, not reduced public spending.

Gopinath said the fund understands the country faces a challenging social and economic situation "which is why we are adopting a flexible and pragmatic approach."

Economy Minister Martín Guzmán, in a recent interview with AFP, said the repayment calendar was "unsustainable" for a country battling a poverty rate of some 40 percent and one of the highest inflation rates in the world at 50 percent.

In the updated forecasts released Tuesday, the IMF projected the nation's economy would slow sharply this year, with growth of three percent after the 10 percent expansion in 2021.

The country has a payment of over US$700 million due Friday, and another of nearly US$370 million by February 1, according to the IMF website.



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