Key week for IMF talks: Argentina due to pay US$731 million on Friday
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Loading... - Darcy Lloyd
- 25 Jan 2022
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Argentina's debt restructuring talks with the International Monetary Fund are entering a crucial phase, with the nation facing payments worth more than US$1 billion in the next two weeks.
President Alberto Fernández's government is currently seeking to renegotiate the terms of a record US$57-billion stand-by loan agreed in 2018. To date, Argentina has received US$44 billion of the credit-line, after having refused the remaining US$13 billion.
Under the terms of the 2018 deal – agreed by Fernández's predecessor in office, Mauricio Macri – Argentina must make a payment on the principal of US$731 this Friday, January 28. A few days later, on February 1, it also faces an additional interest payment on the loan worth US$386 million, a figure the government hopes to lower with its push against IMF surcharges.
The government is seeking a new financing agreement with the Fund that will reduce Argentina's fiscal deficit through growth, not by cutting public spending. President Fernández has vowed not to adopt "austerity" measures as part of any deal.
Latin America's third-largest economy has been in recession since 2018 and is seeking to renegotiate its current plan, with amounts of US$19 billion and US$20 billion due in 2022 and 2023.
The country registered GDP growth of 10 percent in 2021 after a drop of 9.9 percent the previous year largely due to the coronavirus pandemic.
Talks between the government and the multilateral lender are currently stalled, with differences over the size of the fiscal deficit in the coming years the main source of disagreement.
As yet, the Casa Rosada has refused to confirm whether the payments in the next two weeks will be made, preferring to keep its powder dry. However, Economy Minister Martín Guzmán, in an interview with the AFP news agency last week, said the repayment calendar was "unsustainable" for a country battling a poverty rate of some 40 percent and one of the highest inflation rates in the world at 50 percent. Read More…
