Argentina has suspended all payments on its $57-billion debt to the International Monetary Fund.
Vice president Cristina Fernandez de Kirchner announced on Saturday that her country will not pay “even half a cent” until Argentina’s recession is over.
The way a country ends a recession is through “a lot of state investment,” she added, which will leave no funds available for the foreseeable future to make payments on the more than $100 billion it owes to various creditors.
The Argentine peso crashed in mid-2018 after the country entered a recession in that year’s second quarter. The peso lost more than half its value that year and fell more than 35 percent in 2019.
Argentina’s economy contracted at a rate of 3.1 percent in 2019 and inflation is rampant, reaching 52.9 percent in December. The government has predicted inflation will continue at an average of 34 percent this year.
It’s estimated that more than 40 percent of the country’s 44 million people now live in poverty.
An IMF team will go to Argentina this week to discuss the crisis with Fernandez and his advisors.
Fernandez, who assumed the presidency in December 2019, blames the austerity measures of his pro-market predecessor, Mauricio Macri, for the current disaster.
TREND FORECAST: As the global economy slows, Argentinian economic conditions, as with many nations across the globe, will continue to deteriorate and social unrest will sharply escalate. It’s the “New World Disorder,” one of our 2020 Top Trends.
