Argentina’s Battle for Public Debt Default

CEIC Macro Watch: High interest payments on the country’s debt and large budget deficits led to the default of Argentinean debt in 2001 and the subsequent abandonment of the peso’s fixed exchange rate to the dollar. The transition to a flexible exchange rate resulted in the public debt exceeding Gross Domestic Product (GDP). In 2002, public debt suddenly increased to USD151.56 billion (150.7 % of GDP) from USD144.45 billion (53.8 % of GDP) in 2001 due to the sharp devaluation of the Argentinean peso as it floated. The debt has since declined due to the restructuring of the economy. As of 2012, public debt amounted to just 41.6% of its GDP or USD197.46 billion. However, Argentina’s default raises new challenges as the government sees restricted access to the international capital market, especially in the face of increasing bondholder activism and the high perceived asset risk of Argentinean bonds. Discuss this post and many other topics in our LinkedIn Group (you must be a LinkedIn member to participate). Request a Free Trial Subscription. By Darlene Tamayo in Philippines - CEIC Analyst Back to Blog
2nd August 2013 Argentina’s Battle for Public Debt Default

Explore our Data