Debt renegotiation and recession relief in times of quarantine

The government announced that there is no more room for a fiscal adjustment due to critical social needs and that the maturities are unpayable, taking into account that Argentina has a financing need for 2020 equivalent to 22% of its GDP. The International Monetary Fund (IMF) stated that Argentina needs debt relief over the next decade and should reduce financing needs to 3% of GDP. The imminent negotiation poses a “take away” of between $55 billion and $85 billion, with rates between 5% and 9%, and terms ranging from 7 years to 3 years. The recession in Argentina for 2020 expected to be around 1.5%, is likely to worsen, the government has set up a battery of measures for the most vulnerable segments of the population, although there are still unmet demands. The money injection will be approximately 2.2% of GDP.

Source: Ámbito