Infographic: can Argentina reverse its fiscal deficit?

21st November 2019

By The Essential Staff

Infographic: can Argentina reverse its fiscal deficit?

Argentina’s fiscal deficit will be key in Alberto Fernández’s attempt to renegotiate the country’s debt, with the IMF and private bondholders saying a restructuring plan would only be sustainable if it comes with a significant surplus to make payments feasible.

</p> <p>As the graph below shows, Argentina only held a significant fiscal surplus during its last debt renegotiation, following the 2001-2002 default and devaluation. During Cristina Fernández de Kirchner&#8217;s first period in charge, the surplus was lost, never to be regained again.</p> <img class="wp-image-5582 aligncenter" src="" alt="How Argentina's fiscal results evolved between 2003 and 2019" width="556" height="439" srcset=" 300w, 600w" sizes="(max-width: 556px) 100vw, 556px" /> <p>President-elect Alberto Fernández is usually quick to point out that his exit as cabinet chief coincided with the end of the country&#8217;s fiscal surplus. But, after winning the 2019 presidential race on an anti-austerity platform, Fernández might find it tough to reach similar figures again.</p> <p>According to estimations from the Invecq consultancy agency, outgoing President Mauricio Macri will leave his position with a small primary deficit, but a more significant secondary or consolidated deficit, which although lower than the 6 percent of GDP inherited from Cristina Kirchner is still quite high at 3.5 percent, especially considering that Argentina has no access to debt markets and is already suffering from high taxes and high inflation, limiting its options to finance it.</p> <p>Fernández wants to kick debt maturities down the road in order to give some room for the economy to grow, thus diluting the deficit, but most creditors see things the other way round: with no improved figures first, it will be hard to convince them of the sustainability of a new plan.</p> <p>

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The Essential Staff

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