President Alberto Fernández asked his U.S. counterpart Joe Biden to support Argentina to ask the IMF for a renegotiation of its 2022 Extended Fund Facility agreement when the pair met yesterday in Washington, the Argentine leader said in an interview Wednesday night.
“Argentina is in a particularly difficult situation because the effects generated by the drought on the national economy are very negative,” Fernández said. “They’re between US$15 billion and US$20 billion that won’t enter Argentina, they’re between US$5 billion and US$7 billion that won’t enter as reserves, and that’s definitely a very big blow to us.
“So I asked President Biden that I needed him to accompany us in international credit organisms, in some cases for them to assist us financially, and in the case of the IMF, so we can revise the program,” he said.
“Biden sees it clearly,” Fernández said. “That’s why he’s speaking of “building a bridge” allowing us to pass this year without, or minimizing, difficulties, knowing that next year we will recover all the potency we have, and that this year we lost to the drought.”
In March 2022, Argentina signed an agreement renegotiating the US$44 billion debt former President Mauricio Macri acquired in 2018. The deal includes an economic program that Argentina must comply with in order to receive disbursements or payments every three months, which are used to pay for the previous debt with the IMF.
The President added that Argentina’s IMF agreement included a clause stating that if the economic conditions changed due to factors beyond Argentina’s control, it could be revised. He gave the Ukraine war as an example of this, saying it had cost Argentina US$5 billion in unexpected additional energy costs, and added that the drought was a further example.
Argentina has been experiencing a punishing drought that has decimated harvests for key agricultural commodities, especially soy, which are a vital source of export earnings. Earlier this month, the Rosario Grains Exchange cut its soy harvest forecast from the 47 million tonnes predicted in August to 27 million tonnes, clipping Argentina’s 2023 GDP by US$19 billion compared with last year.
Fernández said that Biden compared the debt the Fernández administration inherited from the 2015-2019 Macri government to the economic situation of the US when Biden took over from Donald Trump.