On Thursday, the Economy Ministry announced that it had postponed talks for a second time with international creditors on the restructuring of US$66 billion of debt, this time until June 2. The negotiations were supposed to be completed by May 8 but had already been extended until Friday.
The country has already defaulted on its debt eight times in its history, the last of those being in 2001 when it owed US$100 billion. That triggered a painful social and economic crisis.
Argentina, which has been in recession for two years, currently owes US$324 billion, amounting to around 90 percent of its GDP, according to data compiled by the AFP news agency.
Argentina's main group of creditors is demanding "a direct and immediate discussion" on its restructure plans.
"The group is happy to see that Argentina has expressed its intention to work with the creditors, but actions speak louder than words," said the Ad Hoc group made up of investment funds including BlackRock and Fidelity. "Over the last month, Argentina has communicated virtually nothing of substance to its creditors."
"If the majority agrees to the exchange, the default will be very short. I don't think there will be a reduction in the letters of credit" that would impede essential imports, economist Marina Dal Poggetto from EcoGo told AFP. "But if negotiations take a long time, we'll pay dearly."
The International Monetary Fund, which is supporting Argentina in its restructuring plan, says it has been encouraged by the "willingness of both sides to continue discussions to reach a deal," spokesman Gerry Rice said.
But Capital Economics said "there is a growing risk that the restructuring talks drag on into next year."
Yet more bond interest payments are due at the end of June, which could be delayed by a month.
But if by then there is no restructure agreement, "bondholders will probably consider it more convenient to litigate given they think it unlikely that Argentina will be able to reach a short-term agreement," Ignacio Labaqui of Medley Global Advisors told AFP.