Argentina in “virtual default”, confirms its president

Alberto Fernandez, who took office on December 10, believes that he inherited the situation left by his predecessor and compares the situation to 2001.

Argentina is in “virtual default”. The president of the country, Alberto Fernandez, confirmed it on Sunday, December 22, two days after similar estimates by the financial assessment agencies Fitch and Standard and Poor's. “It's not the same as in 2001, but yes it looks like it”, said the head of state in an interview with América TV. That year, the country had plunged into the most serious economic crisis in its history after declaring itself in default on its public debt.

“At that time, we had a 57% poverty rate, today 41%. We had a debt on which we were defaulting, today it is a virtual default”, he continued. “This is what we inherit. We cannot face and pay the falling bonds”, deplored Alberto Fernandez, who took office on December 10. This leftist president succeeded a liberal, Mauricio Macri, who failed completely economically, leaving a country plagued by recession and inflation. In 2019, GDP should have fallen by 3.1%, and prices should have increased by 55%.

Friday, Buenos Aires had deferred in August the repayment of 9 billion dollars of debt denominated in dollars. Standard and Poor's and Fitch then lowered the rating assigned to “RD” (“selective default”). Public debt amounts to some $ 330 billion, or almost 90% of GDP, including $ 44 billion from the International Monetary Fund. On Saturday, the Congress passed an economic emergency law, which provides among other things for higher taxes for the middle and upper classes, social benefits for the most disadvantaged, and a 30% tax on purchases and other expenses in foreign currency. It takes effect on Monday.


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