Argentinian President Alberto Fernández will today address the virtual Davos World Economic Forum (WEF). Fernández leads a nation struggling to
Argentinian President Alberto Fernández will today address the virtual Davos World Economic Forum (WEF).
Fernández leads a nation struggling to stay afloat in terms of both public health and economic conditions. Argentina has reported more than 47,000 COVID-19 deaths, inflation sits at 40% as the central bank faces calls to devalue the Argentine Peso, and unemployment, already at 11.7%, is expected to rise to 12.3% later this year.
Expect Fernández to continue advocating for and negotiating loan relief from the International Monetary Fund (IMF) while calling for increased foreign private investment. Argentina’s lack of national savings has aggravated the risk of economic contraction as a result of its government-imposed lockdown measures. Last November, the government reached out to the IMF regarding a longer-term Extended Fund Facility to allow for structural reforms and a payment deferral. Although there is still no timetable for the economic plan to be submitted to the IMF, Argentina will need to build up its foreign exchange reserves to pay back its loan while also shrinking the national deficit, two tasks complicated by the economy’s stagflation. Expect a deal with the IMF to be reached by May, although the risk of further economic contraction as a result of lockdown measures is also likely.
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