IMF sees $45bn deal with Argentina pushed into 2022

Bloomberg

The International Monetary Fund (IMF) privately estimates that a deal allowing
Argentina to reschedule payments on $45 billion owed to the lender will be pushed into 2022 as President Alberto Fernandez has little incentive to quickly agree on the basis of a new program.
While the IMF has said it’s constructively engaging with Fernandez’s administration, negotiations entailing fiscal austerity aren’t expected to make much progress before Argentina’s midterm elections in November.
Pressure on Argentina for a faster deal has also eased as the government will likely have enough money to cover $4.58 billion in principal and interest payments due to the Fund later this year. It expects to receive $4.4 billion in IMF reserves in August, as part of a global injection of funds to fight the economic impact of the pandemic, and has also seen larger-than-expected dollar revenue due to rising prices of soybeans, a top export product.
More crucially, Argentina and the IMF haven’t so far agreed on economic projections that will be the basis for a new program, according to two of the people, one of whom called estimates provided by the country overly optimistic.
Argentina’s economy ministry declined to comment. The IMF said it had no additional comments beyond those made by its spokesman Gerry Rice on June 10, when he said the Fund is working on a program to address Argentina’s deep social and economic challenges, without offering a prediction on timing.
Calls are growing louder for Fernandez to put forward a credible economic plan as his government also seeks to restructure debts with the Paris Club. Argentina didn’t make a $2.4 billion payment due in May to the club of rich countries, and both sides continue negotiating during a 60-day grace period. Next year, Argentina owes $18 billion in principal to the IMF, an amount the president says the government can’t pay.
US Deputy Treasury Secretary Wally Adeyemo spoke to Economy Minister Martin Guzman this week on the IMF and Paris Club discussions, saying the US would support a “strong economic policy framework for Argentina that provides a vision for private sector job growth.” Any agreement at the IMF requires US support since it has the largest share of votes.
Argentina began talks last year with the IMF for a revamped program to reschedule payments stemming from a record deal granted to the previous, pro-business government of Mauricio Macri. Guzman initially aimed to close a deal by May.