Debt offer will reflect impact of coronavirus pandemic, says Fernández

Argentina will make an offer to its creditors “in the coming days” that will reflect the economic hit from the coronavirus pandemic, President Alberto Fernández has said in an exclusive interview with Perfil's Jorge Fontevecchia.

While debt talks are “going well,” calculations of debt sustainability will be affected by the impact of the virus, the Frente de Todos leader said.

“The coronavirus affects debt renegotiation just as the coronavirus affects the entire global economy,” Fernández said. “What we are going to sign is something that we can accomplish as a government and as a country. I don’t want to commit to signing something unfulfilled.”

Argentina needs an economic recovery plan akin to the post-World War II Marshall Plan and a massive recovery effort now is more urgent that an inflation containment plan, he told Perfil.

Argentina is in talks to renegotiate US$68.8 billion in international debt with private creditors and has said it aims to avoid a costly default, even after it extended quarantine measures until April 26 to halt the spread of coronavirus. The country’s GDP is now expected to contract 5.4 percent in 2020 from one percent previously, according to a Goldman Sachs forecast.

S&P Global downgraded Argentina to “selective default” last week after the country said it would freeze payments on its dollar-denominated debt under local law until year-end. Earlier in April, Fitch Ratings cut Argentina to “restricted default” and Moody’s announced a similar downgrade.

“What there is not going to be is any type of debt restructuring in pesos,” Fernandez said. “We will meet the debt in pesos.”

The Peronist leader, in a TV interview aired Saturday and Sunday evenings, said the nation’s quarantine measures have been successful in slowing the pace of contagion, adding that he couldn’t say when the measures would end.

The country has 2,142 confirmed cases of Covid-19 and 90 deaths, according to the Health Ministry.

“At this moment I’m not worried about the budget or fiscal deficit,” Fernández said. “The priority is protecting lives and health.”