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IMF working constructively with Argentina on new program, says Georgieva

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WASHINGTON, Feb 5 (Reuters) – The International Monetary Fund is working constructively with Argentina on structuring a future lending program, with a broad aim of balancing financial stability and support for the most vulnerable, Managing Director Kristalina Georgieva said Friday.

Georgieva told reporters she had a “very constructive” phone call recently with Argentine President Alberto Fernandez to underscore the importance of reaching a common view of the future program, but said it was premature to disclose details.

“The technical work is ongoing,” Georgieva told reporters. “Broadly, what we are aiming for (is) to have a common view on a good balance between stability, bringing support for the most vulnerable people in a focused way, and creating conditions for stronger private sector-led growth in Argentina.”

She said discussions were continuing in a very constructive way to reach agreement. “It takes two to tango, so both sides, we need to do our part and find a pathway to an agreement,” she said. “We are not yet at that point.”

Asked about the IMF’s concerns about debt levels in Latin America, Georgieva said the overall debt level had reached 79% of gross domestic product, up 10 percentage points from a year ago, but the IMF was urging Latin American countries to focus more on expanding the conditions for growth now rather than reducing their debt levels.

She praised Latin American countries for taking decisive policy actions early in the pandemic to mitigate against the economic fallout, and said projected growth in the region would help countries service their debts.

But she said the 4% economic growth forecast for Latin America in 2021 lagged the global growth forecast of 5.5%.

“We are more concerned about falling behind in relative terms than we are today concerned about debt levels,” she said. “What we’re urging in Latin America is, please concentrate on the reforms that would bring more vibrancy to growth.” (Reporting by Andrea Shalal, Editing by Rosalba O’Brien)

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