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Montevideo, June 24th 2017 - 08:41 UTC

IMF praises Argentina’s potential for growth, but …

Wednesday, October 28th 2009 - 14:22 UTC
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IMF Eyzaguirre also called for resumption of “statistics credibility” IMF Eyzaguirre also called for resumption of “statistics credibility”

Argentina has the potential for a faster growth, but it needs to do more, especially in policies to return to financial markets said the director of the Western Hemisphere Department of the International Monetary Fund Nicolás Eyzaguirre.

During a conference in Santiago de Chile, Eyzaguirre said Argentina has been favoured by high-prices of commodities, which is boosting Central Bank reserves. “The prospects for Argentina say it could grow much more, but it has to do implement additional policies,” Eyzaguirre told the press.

Eyzaguirre supported ongoing negotiations to resume the supervision of Argentine indices saying Buenos Aires “would profit from the resumption of the supervision of the IMF article 4.”

“(Argentina) is favoured by the price of its exports, but it fails in its attempt to return to financial markets, while it needs funds to expand domestic spending, both private and public,” he added.

In a recent report, the IMF forecast that the Argentine GDP would shrink 2.5% this year and grow1.5% in 2010.

The Argentine Congress is working on law draft to re-open a debt-swap for more than 20 billion dollars in a move to curb sovereign risk obtain funds to boost investment. The swap is seen as a necessary step toward the normalization of relations with the Paris Club and the IMF.

Last week the Argentine government contracted Barclays, Citi and Deutsche banks to advance in negotiations for a debt swap with investors who did not accept the restructuring conditions of 2005.

The swap is essential for Argentina to return to global credit markets with the issuing of a bond which should help the country face heavy payments during 2010.

“Argentina needs to reach an agreement with creditors who did not accept the previous swap and they also need an understanding with the Paris Club”, said Eyzaguirre.

“All this could receive a strong boost with a consultation based on Article IV from the IMF, which is where money markets look for to decide whether to lend or not” he added.

A resumption of “statistics credibility” referred mainly to inflation and growth figures “is a pending debt with the IMF if relations are to return to normal”.

However Economy minister Amado Boudou insisted that the “IMF has been responsible for many of Argentina’s falls, when not all of them”. He added that the Kirchner administration has no plans to request a loan from the IMF “nor is there any interest in participating in (IMF) programs”.

“We’re currently involved in a policy to return to private money markets so we can have an idea of interest rates for the private sector, thus more quality jobs, more access to credit volumes and at more accessible and lower rates”, said Boudou.

Argentina’s Economy minister reiterated before the Budget and Finance committees of the Senate that “before” Argentina reached out to global money markets in desperate exhausting situations and had to accept “humiliating conditions” from the financial centres and policies that definitively showed they were not to the benefit of the country”.

Categories: Economy, Argentina.

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