Daily Times

Argentina and the Paris Club have reached an agreement allowing the South American country to repay nearly $2 billion of debt in arrears over six years until 2028, the grouping of creditor countries said Friday.

The two sides amended earlier repayment agreements “to clear the remaining debt in arrears due to the Paris Club creditors over a six-year period,” the club said in a statement. “The scheme offers a framework for a sustainable solution to the question of arrears due by the Argentine Republic to Paris Club creditors, covering a total estimated stock of arrears of $1.972 billion,” it added. Repayment would now be made in 13 semi-annual instalments, the first due in December this year and the last in September 2028, said the club. Argentina’s Economy Minister Sergio Massa welcomed the agreement to “consolidate the country’s credibility.”

“Many companies here were denied access to credit in Europe and trade with companies from the European bloc because we were still in negotiations with the Paris Club,” he said in Escobar, near Buenos Aires. The agreement is part of a drive by South America’s third largest economy to settle outstanding debt. In March, it concluded a deal with the International Monetary Fund for a refinancing of debt of more than $44 billion. The country is battling high inflation of 66 percent so far this year. Under the IMF deal, Argentina must boost its international reserves and reduce the fiscal deficit from 3.0 percent of gross domestic product in 2021 to 2.5 percent this year, 1.9 percent in 2023 and 0.9 percent in 2024.