Argentina says the IMF’s economic plan would make it impossible for it to recover

Argentina says the IMF's economic plan would make it impossible for it to recover

Argentina’s Economy Minister Martín Guzmán has said the economic plan proposed by the International Monetary Fund as a component of a US$40-billion debt renegotiation would crash the nation’s recuperation. While Argentina and the IMF are “on the same page” on the level of foreign reserves expected to help the country, they differ on how rapidly the government should lessen its fiscal deficit, Guzman said Wednesday as he spread out his most itemized vision yet for negotiations with the Fund.

“What’s the priority?,” he asked. “For us, the priority is that Argentina continues on the path of recovery. For others, the priority could be different.”

The IMF’s proposal would probably “halt the economic recovery that Argentina is witnessing and is essentially a program of real spending cuts,” the minister said during a presentation to governors in Buenos Aires, alongside President Alberto Fernandez.

An IMF spokesperson declined to comment.

What Bloomberg Economics Says

Guzman’s tough stance comes at a critical stage in negotiations with the Fund. After two years without concrete progress, Argentina has large payments due to the IMF this year and Fernandez has already said the government can’t pay.

“The press conference by Argentina’s leaders on Wednesday looked like an attempt to buy time and convince markets, the International Monetary Fund or the government itself that time and bargaining power is on the country’s side. The tone from President Alberto Fernandez and Economy Minister Martin Guzman suggests that no deal is imminent.”

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