The agreement offers Argentina a period of four years and spreads until 2034 the repayment of its debt, which amounts to nearly $ 45 billion.
After the Chamber of Deputies, the Argentine Senate definitely approved Thursday, March 17, the Agreement sealed March 3 by Buenos Aires and the International Monetary Fund (IMF) on the refinancing of the country’s debt. $ 45 billion, releasing its financial horizon in the short term, while leaving it a serious inflationary challenge.
The Argentine President Alberto Fernandez thanked Parliamentarians by pointing out that the agreement would allow the country to have a “highly cleared horizon”. The Minister of Economy Martin Guzman welcomed an agreement “radically different from all those previously concluded with the IMF”. “No right is abducted from the workers, nor to retirees,” he said, while several hundred people withdrawn earlier before the Senate, on the call of trade union and left opposite debt.
The debt agreement had already been approved by the Chamber of Deputies last Friday, which is the subject of a broad transparency consensus, rare in Argentina, between the coalition group in the center-left power and the opposition of center-right. Faced with the spectrum of a default if the agreement was not approved, the same consensus prevailed in the Senate. “This is the responsibility of our government to build certainty in a context of uncertainties,” pleaded the Minister of Economy Martin Guzman, a great artisan of the debt agreement with the IMF, defending it before the senators.
The agreement between Argentina and the Fund provides for a series of macroeconomic measures to control the country’s chronic inflation (50.9% in 2021) and reduce its budget deficit (3% of GDP in 2021) until at equilibrium in 2025. All the regular monitoring of the IMF. In return, the repayment of the debt will only begin in 2026, after a period of four years, to separate until 2034. The time, estimates Buenos Aires, to anchor sustained growth (after 10, 3% EN 2021) Revenue generator.
Inflation of 52.3%
In agreement, Argentina would have been confronted with unpayable deadlines for her over $ 19 billion in 2022, as much in 2023, and about 4 billion in 2024.
However, the shock wave of the conflict in Ukraine could already undermine the anti-inflationary objectives of Argentina, acknowledged Thursday the spokesman for the IMF Gerry Rice. This “will of course be a difficult task given the evolution of the global situation, because the rise in commodity prices affects inflation around the world”, and “Argentina, like other emerging economies, is already affected, “he said.
Argentina recorded in January and February an accumulated inflation of 8.8%, or 52.3% over the last twelve months, ominous for the goal of reducing inflation in a range of 38 to 48% in 2022, compared to 50.9% in 2021. The IMF teams, said Gerry Rice, “examine the potential impact (of the war) on growth, external accounts and the budgetary balance” of the Argentina.