Argentina Debt Offer to Reflect Virus Impact, Fernandez Says
Argentina Debt Proposal to Reflect Virus Impact, Fernandez Says
(Bloomberg) -- Argentina will make an offer to its creditors “in the coming days” that will reflect the economic hit from the coronavirus pandemic, President Alberto Fernandez said in a newspaper interview.
While debt talks are “going well,” calculations of debt sustainability will be affected by the impact of the virus, Fernandez was quoted as saying by Perfil.
“The coronavirus affects debt renegotiation just as the coronavirus affects the entire global economy,” Fernandez said. “What we are going to sign is something that we can accomplish as a government and as a country. I don’t want to commit to signing something unfulfilled.”
Argentina needs an economic recovery plan akin to the post-World War II Marshall Plan and a massive recovery effort now is more urgent that an inflation containment plan, Fernandez told Perfil.
Argentina is in talks to renegotiate $68.8 billion in international debt with private creditors and has said it aims to avoid a costly default, even after it extended quarantine measures until April 26 to halt the spread of coronavirus. The country’s GDP is now expected to contract 5.4% in 2020 from 1% previously, according to a Goldman Sachs forecast.
S&P Global downgraded Argentina to “selective default” last week after the country said it would freeze payments on its dollar-denominated debt under local law until year-end. Earlier in April, Fitch Ratings cut Argentina to “restricted default” and Moody’s announced a similar downgrade.
“What there is not going to be is any type of debt restructuring in pesos,” Fernandez said. “We will meet the debt in pesos.”
Fernandez, in a TV interview Sunday evening, said the nation’s quarantine measures have been successful in slowing the pace of contagion, adding that he couldn’t say when the measures would end.
The country has 2,142 confirmed cases of Covid-19 and 90 deaths, according to the health ministry.
“At this moment I’m not worried about the budget or fiscal deficit,” Fernandez said. “The priority is protecting lives and health.”
©2020 Bloomberg L.P.
