IMF Says It Will Do Everything It Can to Reach a Deal with Argentina

RIO DE JANEIRO, BRAZIL – The International Monetary Fund (IMF) is working constructively with Argentina on structuring a lending program, and both sides need to do their part to get there, Managing Director Kristalina Georgieva said Friday, February 5th.

Georgieva told reporters she had a “very constructive” phone call recently with Argentine President Alberto Fernandez but said it was premature to disclose details of a potential program.

“It takes two to tango, so both sides… we need to do our part and find a pathway to an agreement,” she said. “We are not yet at that point.”

Spokesman Gerry Rice said on Thursday the IMF will do all it can to reach a deal with Argentina by May. Argentina owes the Fund about US$45 billion from an agreement signed in 2018.

“The technical work is ongoing,” Georgieva told reporters Friday. “Broadly, what we are aiming for (is) to have a common view on a good balance between stability, bringing support for the most vulnerable people in a focused way and creating conditions for stronger private sector-led growth in Argentina.”

Asked about the IMF’s concerns about debt levels in Latin America, Georgieva said the overall debt level had reached 79% of gross domestic product (GDP), up 10 percentage points from a year ago, but the IMF was urging Latin American countries to focus more on expanding the conditions for growth now, rather than reducing their debt levels.

She praised Latin American countries for taking decisive policy actions early in the pandemic to mitigate economic deterioration, and said projected growth in the region would help countries service their debts.

But she said the 4% economic growth forecast for Latin America in 2021 lagged the global growth forecast of 5.5%.

“We are more concerned about falling behind in relative terms than we are today concerned about debt levels,” she said. “What we’re urging in Latin America is, please concentrate on the reforms that would bring more vibrancy to growth.”