The International Monetary Fund has described the debt burden of Argentina as being above the tolerance level.
The fund added, in a statement, that a “meaningful contribution” is required from bond holders in the private sector to restore the country’s debt sustainability, according to Bloomberg News.
Debt restructuring
An IMF delegation arrived in Buenos Aires, capital of Argentina, on Friday to determine the debt restructuring that the Argentine government received in 2018.
The IMF statement came after a week of meetings with Argentine officials during its first technical mission in Buenos Aires under the leadership of Alberto Fernandez.
The IMF refuses to forgive it
And the International Monetary Fund announced, on Tuesday, its refusal to exempt Argentina from repaying part of the loan amounting to 44 billion dollars, knowing that the country’s total debts amount to 311 billion, or about 92% of the total output.
Of the $ 311 billion, the government is trying to reschedule $ 122 billion in bonds held by international private investors, and the $ 73 billion table is loans made with creditors, whether bilaterally or multilaterally. As for the rest of the public debt, which amounts to about $ 116 billion, it is an internal debt of several parties, most notably the Central Bank, the National Bank of Argentina, and the pension system.
Christina Georgieva, director of the International Monetary Fund, said in an interview with Bloomberg Network, that the Fund strongly supports this government’s commitment to stabilize the economy and return to growth.
Georgieva answered a question about the “deep debt restructuring” recently proposed by Argentine Economy Minister Martin Guzman in a speech to Congress, “It is the job of the government, not the International Monetary Fund.”
She indicated that more time is required to obtain data on the sustainability of the country’s debt, noting that the IMF continues to support the Argentine government in its efforts to resume economic growth.
Contraction of the economy
Argentina is suffering from a downturn and an acceleration in inflation, amid concerns about its ability to pay off its external debt.
Argentina is likely to fulfill its commitment obligations to pay international bonds in January, after the Finance Ministry had access to central bank reserves.
the government Argentinian
The Argentine government is seeking to accelerate planning, promotion, negotiation and approaching a deal by the end of next March, and said that the experts of the Oxford Economics Institute for Economic Studies have indicated that the International Monetary Fund may not intervene significantly until 2021.
Experts pointed out that the Fund’s intervention will take place when Argentina must pay its debts to multinationals.
Analysts
Analysts of the Telemer Foundation, which specializes in developing economies research, including Stuart Collverhouse, believe that the ambiguity surrounding the IMF intervention over the next two months may affect the confidence of bond holders in the government’s commitment to any plan.
It should be noted that in 2015, with the arrival of a liberal government, public debt was $ 241 billion, and its ratio to output was only about 53%. But the country’s lack of investment has pushed the government to borrow more.
The Federal Reserve
When the Federal Reserve began raising interest rates from mid-2018, many capitals came out of the country, so the currency exchange rate fell strongly, and inflation rose at high rates, forcing Argentina to seek support from the International Monetary Fund, which approved a loan of 57 One billion dollars was transferred from it only 44 billion because the new president, Alberto Fernandez, asked to stop the transfer and stop the payment of debt installments, and to start a comprehensive loan restructuring, because the maturities of 2020 exceed more than 34 billion dollars, and the government cannot fulfill them.
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