Bank of America’s forecast is based on the “massive” IMF debt maturities and the “very negative” consequences on the exchange rate between currencies and inflation due to possible late payments. Specifically, the bank estimates the maturities that Argentina will have to face at the end of the year with the IMF at US $ 20,000, a situation that makes the agreement between the parties an “urgent” matter, the statement said.
“Our base scenario is that the agreement with the IMF ends in March and between December and January an agreement is reached at the level of technical personnel,” specified the report published by the Europa Press agency.
In the event of not reaching an agreement, Bank of America pointed out that the country could enter a spiral of arrears in payments with insufficient international reserves –U $ s7000 million dollars- and a “limited” access to credit.
“This could have strong consequences on foreign exchange flows, multilateral financing, investment and could impact the foreign exchange market that is already under pressure,” the report said.
Likewise, the entity warns that the government will have to adjust fiscal and monetary policy after the elections to begin accumulating reserves.
On the other hand, the bank forecasts that inflation for 2021 will be above 50% and that GDP will grow by 7.3% compared to the 8% forecast made by the government.
In the meantime, the Minister of Economy Martín Guzmán is involved in the debt agreement. The Chief of Staff, Juan Manzur, and the Minister of Economy, Martin Guzman, met in New York City with businessmen and investors from US companies, to whom they expressed the Argentine willingness to close an agreement with the International Monetary Fund (IMF) but that “does not obstruct the development of the country.”
In contact with the press, Manzur described the meeting as “very productive” and said that on the IMF issue, investors expressed their “questions and queries”, which were answered by the delegation. “We have centrally and punctually expressed the political decision and the will of the Argentine government to agree with the IMF. Obviously in terms that do not imply obstructing the development of Argentina,” said the official. In that sense, he stated that “a positive agreement with the IMF is a national priority that involves all sectors of Argentine society.”
In turn, the minister agreed with the former governor of Tucumán, stating that “it was very productive” and specified that he gave them “the entire macroeconomic programming scheme, in which very important steps are being taken to reassure the Argentine economy.”
The objective, he stressed, is to achieve a program that “Include conditions that establish a path consistent with the sustainability of debt maturities.”
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