Monday, July 22, 2024

ECONOMY | 25-03-2021 18:09

IMF says 'progress' made after Guzmán visit

Mixed messages all round as IMF says it has "made progress" with Economy Minister Martín Guzmán, despite comments from Vice-President Cristina Fernández de Kirchner.

Officials with the International Monetary Fund said on Thursday they had made headway in negotiations with Economy Minister Martín Guzmán on a new loan package for the country as it grapples with an economic crisis made worse by the Covid-19 pandemic.

The discussions between Guzman and Julie Kozack, IMF deputy director for the western hemisphere, and Luis Cubeddu, mission chief for Argentina reached "a common understanding of the need for macroeconomic sustainability and for safeguarding the post-Covid recovery underway," the Washington based-crisis lender said in a statement.

"The Argentine authorities and the IMF team made progress in defining some key principles that could underpin an economic programme to help address Argentina's near- and medium-term challenges," it added.

The two sides had a "shared recognition of the importance of policies to boost value-added exports and productivity," to improve the Alberto Fernández administrations international reserves and help the economy improve growth and become more resilient.

"The Argentine authorities and the team also concurred that the ongoing development of the domestic capital market would be critical for Argentina to sustainably finance much-needed investment and strengthen its overall resilience."

“The IMF team and the Argentine authorities will continue working together with a view to deepening their understandings in these key areas," the statement concluded.

Argentina and the International Monetary Fund have been in discussions for months to agree on a suite of reform measures that could unlock new funding to help the country recover from its economic crisis.

Even prior to the pandemic, the nation was facing a severe economic crisis despite massive IMF aid in recent years. 

The government is aiming to renegotiate repayments on a US$44-billion loan received from the IMF in 2018. 

Thursday's statement arrives on the back of a heavily symbolic few days for the relationship between the two parties. In a speech one day earlier, Argentina's powerful Vice-President Cristina Fernández de Kirchner had declared that Argentina did not have the cash to repay the IMF. On the same day, however, President Fernández told officials from the World Bank that his country would honour its debts.

According to reports, Argentina and the IMF are at odds over the length of a future financing programme, with sectors of the ruling Peronist coalition seeking to delay repayments for as much as 20 years. 

IMF spokesperson Gerry Rice said earlier Thursday that any deal would be limited to 10 years at the most.

"What the Argentine authorities have indicated is that they would prefer an Extended Fund Facility in support of their plans and that the disbursements made under that plan are repaid over a period of four-and-a-half to 10 years. These conditions are applied uniformly. for all countries, not just for Argentina," said Gerry Rice.


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