Argentina agrees to hold talks with the International Monetary Fund

Argentina agrees to hold talks with the International Monetary Fund

Argentina announced that it agreed with the International Monetary Fund to start talks aiming to reach a new financing agreement for this heavily indebted South American country, and the announcement came after the International Monetary Fund Director Cristalina Georgieva met with Argentine Minister of Economy Martin Guzmán on the sidelines of the Group of Twenty meetings in Riyadh.

A few days ago, experts from the Fund concluded that Argentina’s debt is at an unsustainable level, meaning that the state’s revenues will not be able to service the enormous cost of the debt. Argentine President Alberto Fernandez hopes to renegotiate about 195 billion dollars of the external debt value of 311 billion, among which A $ 57 billion loan from the IMF for a bailout plan.

“Minister Guzmán and I have had a fruitful exchange of views on the challenges facing the country and the way forward to advance to ensure more sustainable and inclusive growth for Argentina,” said Georgieva in a statement.

She added: “I commended the efforts made so far, under Fernandez’s leadership, to develop a set of policies that stabilize the economy and reduce poverty.” Georgieva noted that she discussed with Guzmán “plans to secure a sustainable and orderly solution” to the debt situation in his country, and welcomed the commitment of Argentina “Deepening our participation, including through advice under Article 4, and taking steps towards a program supported by the Fund in the future.”

“We will continue to discuss support for the next steps,” Georgieva said, and the Argentine Ministry of Economy issued a similar statement on entering into talks with the International Monetary Fund, and a ministry spokesman told France Press that negotiations would continue on Monday when Guzmán met with IMF experts in Washington.

On Friday, the State Statistics Institute of Argentina stated that the country’s economy contracted by 2.1% in 2019. Argentina has suffered from recession since mid-2018 with high rates of poverty and unemployment, with inflation exceeding 50%.

The IMF said earlier that Argentina’s ability to service its debt has deteriorated significantly compared to the last analysis conducted by the Fund in July 2019, when there was the possibility to control the debt, and since then the value of the peso has decreased by more than 40%, and the monetary reserves have declined by 20 billion Dollars, and GDP contracted more than expected.

Argentina is striving to avoid a similar fate to what happened in 2001, when it defaulted on $ 100 billion and became an outcast in international financial markets, and Argentina is currently under debt of $ 311 billion, or more than 90% of its GDP.

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