BUENOS AIRES: Backed by the International Monetary Fund, Argentina is looking to renegotiate its debt but it faces a race against time to secure short-term relief.

Since assuming power in December, President Alberto Fernandez’s government has insisted it will not be able to pay off its creditors if its economy - in recession since mid-2018 - doesn’t resume growth.

And more than $30 billion of debt repayments are due before the end of March.

Faced with unyielding creditors who won’t give an inch, Argentina found an unlikely ally when the International Monetary Fund declared that the South American country’s debt is “unsustainable” following a week long mission that ended on Wednesday.

“We were accused of being populists, irresponsible, but it turns out that we woke up today with the IMF having said we were right,” center-left Fernandez said on Thursday.

Argentina is battling to avoid another situation like 2001 when it defaulted on $100bn, becoming a market pariah.

The country currently owes $311bn - more than 90 per cent of its GDP.

It’s hoping to renegotiate $195 billion, including the $44 billion it owes the IMF.

“I think we have a good chance to negotiate something reasonable because the IMF wants to avoid a default,” Hector Torres, Argentina’s former representative to the world finance body, told a local radio station.

The IMF’s position “isn’t encouraging for the Argentine economy but it is for the negotiation. It’s a slap on the back for the government,” Matias Rajnerman, the chief economist at consultancy Ecolatina told AFP.

Published in Dawn, February 22nd, 2020