Argentina's debt " is not sustainable ". The International Monetary Fund (IMF) has just completed its mission in Buenos Aires, which began on Wednesday, February 12. And, its conclusions are far from optimistic.
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Argentina's debt - which represents more than $ 311 billion, or more than 90% of GDP - is today " unsustainable " according to " IMF staff, " the international organization said in a statement. She calls for the contribution of bondholders to " help restore debt sustainability ".
" The Argentine authorities are trying to remedy the difficult economic and social situation the country is facing, " added the organization. They have implemented a set of policies to deal with the increase in poverty, while taking measures to stabilize the economy . ” However, the Fund believes that further efforts are needed to reduce inflation.
$ 44 billion debt
Except that the debt and the ability to repay interest " have deteriorated significantly compared to the last analysis of the debt sustainability of the IMF in July 2019 ", which had then concluded that the debt was sustainable. Since then, the peso has depreciated by more than 40%, international reserves have shrunk by around $ 20 billion and real GDP has contracted more than expected. Argentina's debt to the IMF is $ 44 billion.
Two months after taking office, Argentinian President Alberto Fernandez, a center-left Peronist, said that his country's debt is not repayable as it stands. He called on the IMF and bondholders to renegotiate terms, capital and interest. Argentina had canceled all of its debt to the IMF in 2006. However, the Liberal government Mauricio Macri (2015-2019) contracted in 2018 the largest loan in the history of the Fund for $ 57 billion.
In addition, Argentina is facing the worst economic crisis since 2001. The economy has been in recession for almost two years and the poverty rate has reached almost 40%. Faced with this situation, Alberto Fernandez abandoned the latest disbursements, bringing the debt to the IMF to $ 44 billion. In 2001, Argentina had experienced the biggest default in history and a serious economic and social crisis that had traumatized Argentines and the financial markets.
