Argentina currently has a debt of $ 324 billion, accounting for 90% of its gross domestic product
The International Monetary Fund has revealed the truth about the news that Argentina, which is liable to bankruptcy if negotiations to restructure a debt of half a billion dollars, has applied for a new loan, which the Fund has denied, despite its expectation to enter into negotiations with the Tango countries soon.
Gary Rice, spokesman for the International Monetary Fund, said in an online press conference, that the Argentine authorities have not requested from the Fund for loans or a new financing program during the current stage, but this is not necessarily related to conducting consultations between the two sides in accordance with Article 4 of the Fund’s charter.
This comes while the Argentine government is still trying to reach an agreement with international creditors on restructuring $ 65 billion of the foreign debt owed on it.
Argentina defaulted on nearly $ 500 million in debts in May, and failure to reach an agreement to restructure the state’s debt could threaten bankruptcy.
Argentina’s debt currently stands at $ 324 billion, accounting for 90% of its GDP, including $ 65 billion for foreign investors.
Most of this debt has formed since 2016, when international investors were optimistic about President Mauricio Macri’s capitalist government, which raised the stakes on reviving growth after years of government intervention in the economy, under the leadership of former President Cristina Fernandez de Kirchner.
However, things went wrong in the Macri era, with the currency plummeting and inflation rising.
And in 2019, left-wing Alberto Fernandez (Kirchner ally) won the presidency of Argentina to take a different approach to debt, by stopping interest payments and renegotiating.
The Guardian says, in a previous report, that most of Argentina’s foreign currency debts at the end of last year amounted to 414 billion dollars, or 93%.
Argentina obtained the largest loan in the history of the International Monetary Fund in 2018, worth $ 57.1 billion, with a period of three years.
A group of leading economists, including Thomas Piketty and Nobel Prize winner Joseph Stiglitz, urged bondholders to take a constructive approach to restructuring Argentina’s debt.
They said debt relief for the country would be “the only way to fight the epidemic and put the economy on a sustainable path.”