The country does not need to devalue the monetary sign, what it needs is credit to renew the maturities of future capital, and lower the country risk. It must be remembered that the government systematically shows fiscal surplus, therefore, tax revenues finance the sum of all expenses plus the interests of the debt, therefore, there is no increase in public debt. On the other hand, as it lacks financing to pay the capital debt stock, it does so with its own resources, and this generates stress in reservations.
It is impossible for an economy as beaten as Argentina, paying the debt capital stock, pays all the interests that expire, but cannot pay capital, something that happens to all the countries of the planet. The interests of the debt are paid, but the capital is renewed, if the GDP grows, the debt on GDP will decrease, now it may be canceled part of said debt.
It would be interesting to analyze the debt of the Argentine public sector, which is what is known as the treasury debt. The debt stock amounts to US $ 465,352 million, which represents 66.1% of GDP, at first glance it is high, but we should do some considerations.
The debt is divided into 3 well differentiated parts, namely:
. – Intra-state debt or between public sector agencies adds US $ 207,934 million, this debt was conformed between the Treasury and State agencies such as the Central Bank, ANSES or other agencies, therefore, it is not a enforceable debt, since it is the State that is due to themselves. This debt represents 44.7% of the total debt. In our opinion, it is not relevant for the analysis of the sustainability of the payment of the future debt.
. – Private debt, this debt adds US $ 161,876 million, represents 34.8% of the total debt, and it is the most relevant debt since it involves the State with private, this debt today is worth approximately 55%, if the government wanted to repurred it, it would need US $ 89,032 million. Private debt is equivalent to 23.0% of GDP and looks very low, only if we compare it with the debt of other countries.
. – Debt with the IMF, bi and multilateral organizations add US $ 95,542 million, represents 20.5% of the total debt, and 13.6% of GDP. This debt is enforceable, but as they are international organizations, its renewal is tied to more political than economic – financial variables.
From the following analysis we can observe that Argentina’s enforceable debt, which is the sum of the most IMF and most multileral bi -bodies add US $ 257,418 million and represents 36.6% of GDP.
This same debt in 2017 added US $ 143,852 million, this implies that in the last 8 years we borrow at a rate of US $ 14,195 million per year. The most interesting thing is that of the total indebtedness, the private debt increase by US $ 45,451 million, while the debt with the IMF and bi and multilateral organizations increased by US $ 68,115 million.
Who more money lent us in the last 8 years was the IMF and international organizations, which did so at a rate of US $ 8,514 million per year. If such assistance had not existed, Argentina would have had a hyper inflation event or a greater devaluation than the one observed in that period.
It is comic that many express that the country’s problems is their link with the IMF, when in reality it is the institution that sank the most money in the country in the last 8 years. They believe more in Argentina than Argentines themselves.
Between July 2017 and August of the year 2025, human people bought dollars for the equivalent of US $ 118,797 million, in no way is a criticism, human people tried to protect their savings, and how well they did, but when measuring who put money and who not, the IMF put more than the whole of human people in the country.
Conclusion
. – The Argentine debt is payable, and this government demonstrated it by honoring all the debt maturities ahead. What is difficult to honor are capital maturities, which are the ones that end up affecting the price of the bonds that are contained in the private debt that adds, barely US $ 161,876 million.
. – If Argentina makes the United States Treasury a guarantee to the government, so that it clear doubts about the payment of the public debt capital, local bonds should not have return rates of 15% per year, they would have to have a much more reasonable return rate that is located around 9.0% per year. This implies a large rise for all Argentine risk assets, bonds in dollars, pesos and shares. Dollar to forget to go up.
. – The agreement between Argentina and the United States helps sustain intertemporal solvency, since it enables the country to renew the debt capital stock without problems. If the country risk lowers the corporate risk, which is the interest rate to which companies are financed abroad, and this leaves space for the interest rate to fall in the local market, and allow SMEs a substantial improvement in the financing of their projects.
. – It remains ahead of tax, labor and pension reforms. It should also work on the monetary program to reduce the interest rate in the local market, the inflation rate will come for the fifth consecutive month below 2.0% per year, now it is the turn that the interest rate of an important turnaround and begins to lower in the market.
. – It is not the dollar, it is the country risk that involves Argentine growth. Hopefully the agreement with the United States achieves that the debt is renewed in more term and less rate, and that Argentines invest more in pesos and less in dollars, as happened in the last 8 years. If we look at the purchase of human people from 2003 to date, add up to US $ 237,215 million, the obsession for thinking that Argentina has no way out, has to change.
Source: Ambito
I am a 24-year-old writer and journalist who has been working in the news industry for the past two years. I write primarily about market news, so if you’re looking for insights into what’s going on in the stock market or economic indicators, you’ve come to the right place. I also dabble in writing articles on lifestyle trends and pop culture news.
