The agreement on the rescheduling of the country’s debt repayments to the International Monetary Fund, announced on 28 January, must still be approved, and its detailed modalities.
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More two years after his arrival in December 2019, with the burden of debt restructuring with the International Monetary Fund (IMF), the Argentine President, Alberto Fernandez (left center), was relieved , Friday, January 28th. “We had a rope around the neck, a sword of Damocles. We now have a path that opens before us,” he defended, at the announcement of an agreement of principle on the renegotiation of A loan of about $ 45 billion (over 39 billion euros) contracted in 2018 by the previous Government of Mauricio Macri (right center).
It’s “a possible and reasonable solution”, supported the president. Without this agreement, the country would have been confronted with untenable repayments, more than $ 19 billion in 2022, as much in 2023, and close to 4 billion in 2024. They will be reschedulled. The Minister of the Economy, Martin Guzman, detailed the outlines of these “really difficult negotiations”. They are based in particular on a control of the public deficit, called to decrease gradually, by 3% of the gross domestic product (GDP) in 2021 to 2.5% in 2022, 1.9% in 2023 and then 0.9% in 2024. / p>
The levers of this screw turn? No action of austerity, assured the leader. “All the rights of our retirees will be preserved,” he says, and “no reform of labor law” or “privatization of public enterprises” do not point to the horizon, in order, among other things, not annoy the recovery. GDP has indeed bound by 10.8% on the first three quarters of 2021, after three years of recession.
No devaluation in view
Without giving numerical references to inflation, poorly endemic inflation (nearly 51% in 2021), the minister has announced a reduction in monetary issue and rejected any devalulatory policy. “The announcement of a compromise and the payment of the deadline are positive new ones that relieve tensions and help reduce uncertainty”, evaluates the Argentine Argentine Cabinet Abeceb, in a nuanced note published on 28 January.
If the target of reducing the public deficit in 2022 seems realistic, the firm judges that of 2023 “more doubtful, since it is an election year”, with a presidential election in October. “It will have to be devalued more, and beyond inflation, to find competitiveness,” continues the cabinet, which remains “prudent, waiting for details”.
remain to be specified, in particular, the new payments schedule, the possible objectives of inflation, or the contours of monetary policy. This is a “bad” pre-agreement, Analysis Andrés Asiad, economist and director of the Center for Economic and Social Studies Scalabrini ORTIZ: “He does not solve the question of debt on the medium and long term, and does not bring stability in the short term or economy, nor to the current government. “
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