The International Monetary Fund’s director for the Americas said Thursday that “a lot of advanced work” has been made in talks with Argentina over a new financing programme, but he underlined that when a deal would be reached depended on the Alberto Fernández administration.
"The decision of when [an agreement is reached] is obviously much more on the side of the Argentine authorities than on our side," said Alejandro Werner, director for the IMF’s Western Hemisphere Department.
The government and the IMF are engaged in negotiations over the terms of a new programme to replace the existing US$57-billion bailout agreed in 2018 under former president Mauricio Macri. Argentina has received US$44 billion to date and faces a heavy repayment schedule for the next few years.
A number of key officials – including President Fernández, Vice-President Cristina Fernández de Kirchner and Economy Minister Martín Guzmán – have stressed that Argentina cannot repay its debts without a prior economic recovery. The country, which has been in recession since mid-2018, saw GDP slump by 9.9 percent last year amid the coronavirus pandemic.
Guzmán initially expressed hopes that an agreement could be reached with the IMF before May, but Fernández has indicated on several occasions that he does not want to rush into any new accord. Last month, the president declared the debt with the IMF "is unpayable" under the existing conditions agreed by the Macri administration.
Argentina also faces key midterm elections in October, which are likely to impact any future deal.
Speaking during a press briefing, Werner said he couldn’t say when the best time for a deal would be. Though he noted that "a lot of advanced work" had been done and that there is a level of understanding on which to move forward very quickly, "as long as it is decided to have a relatively quick agreement.”
The IMF forecasts a recovery of 5.8% growth for Argentina this year, which would finally lift the economy out of recession. Werner warned, however, that Argentina’s inflation rate was a cause for "concern."
Over the last 12 months, consumer prices have risen 42.6 percent in Argentina, according to government data.
"An economy with high inflation does cause concern, and inflation in Argentina is high. It has been high for the last four years, and it is a significant challenge," Werner said.