Argentina and the IMF announced Saturday that they have agreed to start talks aimed at reaching a new financing agreement for the heavily indebted South American nation.
The announcement in statements by both parties came after a meeting between IMF Managing Director Kristalina Georgieva and Argentine Economy Minister Martin Guzman on the sidelines of a G-20 meeting in Riyadh.
The meeting came days after IMF experts concluded that Argentina's debt is unsustainable.
Argentine President Alberto Fernandez hopes to renegotiate $195 billion of its $311 billion foreign debt, including a deeply unpopular $57 billion IMF bailout loan in 2018.
Fernandez, who took office in December, has refused the final $13 billion disbursement of the loan, leaving Argentina's exposure at $44 billion.
"Minister Guzman and I had a very fruitful exchange of views on the country's challenges, and the path forward to ensure a more sustainable and inclusive growth for Argentina," Georgieva said in a statement. "I commended the efforts thus far, under the leadership of ... Fernandez, to put in place a set of policies to stabilize the economy and to reduce poverty."
Georgieva said she discussed with Guzman plans "to secure a sustainable and orderly resolution" to his country's debt situation, and welcomed Argentina's commitment "to deepen our engagement including through an Article IV Consultation and steps toward a Fund-supported program in the future. "The modalities of these next steps will continue to be discussed," Georgieva said.
Argentina's economy ministry issued a similar statement on engaging in talks with the global financing institution.
Negotiations will continue Monday as Guzman meets with IMF experts in Washington, an economy ministry spokesman told AFP.
Argentina's economy shrank by 2.1 percent in 2019, the state statistics institute said Friday. The country has been in recession since mid-2018 as poverty and unemployment rise, with inflation surpassing 50 percent over the last year.
Argentina's ability to service its debt deteriorated markedly compared to the IMF's last analysis in July 2019, the fund said earlier, when the amount owed was manageable.
Since then the peso had depreciated by over 40 percent, international reserves declined by about $20 billion, and real GDP contracted more than previously projected. Argentina is battling to avoid another situation like 2001 when it defaulted on $100 billion, becoming a market pariah.
The country currently owes $311 billion - more than 90 percent of its GDP.
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