Tuesday, July 7, 2020
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ECONOMY | 23-03-2020 08:11

Government warns creditors that virus crisis will delay 'uncertain' recovery

"The debt is not payable due to the critical situation in the country, in a context in which interests have grown rapidly," he said.

The government has warned private creditors that Argentina's economic recovery "is uncertain" and that its debt crisis could be prolonged due to the coronavirus pandemic.

"The times and intensity of the recovery [of the economy] are uncertain, due to the situation associated with the coronavirus, which could prolong the crisis," Economy Minister Martín Guzmán said in a teleconference presentation to private bondholders on Friday.

"The debt is not payable due to the critical situation in the country, in a context in which interests have grown rapidly," he said.

Shortly before that presentation, International Monetary Fund (IMF) Managing Director Kristalina Georgieva had urged Argentina's private creditors to accept "substantial relief" in order to ensure the sustainability of the country's debt burdern, which totals more than $ 311 billion.

Ten days ago, the government authoritised debt restructuring talks with private bondholders for notes worth US$ 68.842 billlion. It intends to present an offer before the end of March. It will probably include an extension of maturity terms and reductions in capital or interest.

"The Argentine government wants to recover the capacity of growth and provide the conditions for the return to international markets," said the official.

However, he stressed that under current conditions "gross financing needs for the next four years amount to US$300 billion."

Argentina has been recession for almost two years. It registered falls of gross domestic product of 2.1 percent in 2019 and 2.5 percent in 2018. 

The IMF's forecast for 2020 was, before the start of the pandemic, of a 1.3 percent contraction for Argentina.

– TIMES/AFP

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