The analyst, who began to be the benchmark for the rating agency in the country, said that “the IMF has given a diagnosis in your opinion of how it is doing in adjustment and that is willing to release the new tranche of the loan that corresponds to this month for US$6,000 million”.
In this regard, he stated that the rating agency he is “very concerned” about the multiple types of exchange that “have been implemented, which from our point of view limits the potential to continue maintaining the adjustment that is being pursued with this program”.
Reusche also considered that among other problems that Argentina will face in 2023 is “the electoral process that is coming in October” and before that “a series of risks for the agricultural sector”.
“There are indications that the crop is subject to many risks due to the drought, which limits the ability to attract financing flows and reach the net reserve targets”explained the economist.
In addition, he explained that for next year “there is a domestic debt amortization peak between June and August that seems relatively dangerous if one looks at this in the context of the elections”.
“Taking all this we see a rather complicated picture for 2023. We see more important risks than what the IMF is communicating, not only for the continuity of the program but for macroeconomic stability further despite the fact that there are indications that inflation may start to slow down next year,” Reusche explained.
The Economist suggested thenas one of the most important measures that Minister Sergio Massa should implement, the unification of the exchange rate in “a competitive level”.
Moody’s maintains Argentina in the Ca stable rating, which is the rank before last on a 20-notch scale to measure countries’ sovereign debt risk and has no prospects for improvement.
Regarding the debt in dollars, he maintained that “some type of restructuring may be needed by the end of 2024 or 2025.”
“The current IMF program only allows rollover and more net financing will be required from the second half of 2024 and in 2025. The expectation is that there will be a restructuring in dollars or default,” he said.
Source: Ambito
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