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ECONOMY | 16-01-2023 14:35

Massa: IMF failing to consider impact of Ukraine war on debt deal

Economy minister accuses IMF of reneging on a commitment to fully review and consider the impact of the war in Ukraine on Argentina’s debt deal.

Sergio Massa says the International Monetary Fund (IMF) is reneging on a commitment to fully review and consider the impact of the war in Ukraine on Argentina’s economy.

"Argentina fulfilled its programme, but the IMF is not fulfilling its commitment to Argentina to review how they are going to compensate the countries that paid the cost of the war with their economy. It is a problem to be solved," Argentina’s economy minister said in an interview with the Infobae website published on Sunday.

In March 2022, President Alberto Fernández’s government renegotiated the US$44.5-billion credit-line Argentina negotiated with the multilateral lender in 2018 during the Mauricio Macri presidency. 

At the G20 leaders summit in Bali, Indonesia, last November, President Fernández and IMF Managing Director Kristalina Georgieva discussed "the negative impact of the war for the whole world," specifically the difficulties for emerging economies.

At that time, Georgieva recommended that Argentina’s government "maintain the course"  it had adopted in recent months since Massa assumed office as economy minister and stick to the targets outlined in the agreement. 

Foreign Minister Santiago Cafiero said at the summit in Indonesia the war in Ukraine has cost Argentina’s economy around US$5 billion.

Last December, the IMF approved renegotiated 2022 fiscal and monetary targets for Argentina, which ended last year with an annual inflation rate of 94.8 percent – the highest official figure for 32 years. 

The government estimates that the country recorded five percent growth in 2022.

In the interview, Massa said Argentina's current debt problems were a result of the multi-billion-dollar loan contracted with the IMF by Macri’s government.

"It is a bomb that has to be managed and that limited [Argentina’s] capacity for growth," the minister declared.

"Our main objective is to lower inflation without freezing the economy, because the peace of the cemeteries is of no use to anyone," he said, alluding to criticism from opposition economists who are demanding a greater fiscal adjustment.



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