Argentina posts first current account surplus since 2009

[peppertree]

Argentina's National Institute of Statistics and Censuses (INDEC) reported this week that the country registered a current account deficit of $1.372 billion in the fourth quarter - but closed 2020 with a surplus of $2.985 billion, its first since 2009.

The surplus included a $12.53 billion trade surplus, offset by foreign debt interest payments of $11.25 billion - a 35.3% reduction largely due to the successful refinance of $66 billion in foreign debt by Economy Minister Martín Guzmán in August.

The balance of payments report likewise showed the country's public foreign debt shrinking by $7.67 billion in the first 9 months of 2020, to $189.7 billion - the first net reduction since 2013.

Argentina's public foreign debt had doubled to $197.4 billion during former President Mauricio Macri's 2015-19 tenure, leading to a record $57 billion bailout from the IMF - reportedly at the behest of former President Donald Trump.

The Argentine economy meanwhile declined in 2020 by 9.9% - its worst showing since the 2002 post-convertibility crisis.

Early lockdown measures in response to the ongoing coronavirus pandemic led to a sharp recession in the 2nd quarter (-19%), though GDP has recovered steadily since May to within 1.3% of pre-pandemic levels by January.

At: https://translate.google.com/translate?sl=auto&tl=en&u=https://www.politicargentina.com/notas/202103/36295-con-pandemia-pero-sin-macri-el-indec-demostro-con-datos-que-en-2020-se-redujo-fuerte-la-deuda-externa-bruta.html

Argentine Economy Minister Martín Guzmán points to data during a recent press conference.

The center-left Alberto Fernández administration has prioritized debt sustainability following a doubling in public foreign debt under his right-wing predecessor Mauricio Macri.

Argentina is currently in talks with the IMF to refinance $45 billion borrowed by Macri - part of over $100 billion in additional net foreign debt during his 4-year tenure.

Guzmán noted that while he hoped to sign a fresh agreement with the IMF in May as originally planned, that date was flexible.

[Judi Lynn]

1. OMG! What excellent news! Looking forward continually to word from this progressive President!

How absolutely wonderful.

President Alberto Fernández entered a position which look impossibly screwed, almost far beyond help for a long time to come, thanks to the all-out destruction of the economy by fascist, greedy, unprincipled Mauricio Macri. He spent his entire 4 years driving the country into the ditch while making off with everything which wasn't tied down, along with his cohorts.

Macri was the South American Trump even before Trump waddled into office, and well before Bolsonaro illegitimately goose-stepped into Brazil's Presidency and became deemed the "Trump of the Tropics."

What a great news flash this is to read April 4, 2021. not even so long after Alberto Fernández' inauguration.

Thank you, peppertree!

[peppertree]

2. A "heavy inheritance" made all that much more difficult by the Covid pandemic

"Heavy inheritance" is the term Macri would often use to describe the situation left to him by Cristina Kirchner - with right-wing media echoing that term, day in and day out.

But to investors (to whom you can't lie that brazenly), he'd boast about "the low debt levels" and other positive economic numbers Argentina had at the time (2015).

"It's a blessing," is how his future Economy Minister Nicolás Dujovne put it (the one with the million-dollar house he wasn't paying taxes on).

Well now, it really is. But it's good to see the new team take the problem on, and actually tackling it a little.

Next up: negotiations with the IMF over the Macri bailout.

Argentina's facing $18 billion in payments in 2022, and another $19 billion in 2023 - which they can't afford without either a) refinancing; or b) new IMF loans, to pay the old Macri ones.

And the IMF is adamant they'll only accept option B, so that's what it'll probably "B".

Thanks again for taking the time to read, and share your thoughts and good wishes Judi. Have a good and restful Sunday.