Argentina’s public debt to its GDP ratio topped 100% in January, as the country’s economy rebounded from a severe recession.
Argentina’s debt-to-GDP ratio is the ratio of the country, which has a nominal GDP of about $2.6 trillion, to its gross domestic product, which is roughly $17 trillion.
According to the IMF, Argentina’s government is facing a “critical” fiscal gap of about 17% of its gross debt, which would require it to borrow at least $1.6 billion per month to cover its current obligations.
Argentina’s economy is forecast to shrink by 5% this year.
Inflation and the IMF’s own estimates suggest Argentina’s inflation rate will increase in 2018.
However, inflation remains low and the economy remains largely insulated from the impact of global economic turbulence.
“The country is still benefiting from low inflation, relatively stable inflation expectations, and a low level of external debt,” the IMF said in a statement.
“Moreover, the economy has recovered from the shock of the global financial crisis in 2015 and has remained resilient and stable over the last few years.”
The IMF expects inflation to rise to 2% this month and the government has indicated it will gradually reduce the current account deficit.
The IMF expects Argentina’s central bank to be able to meet its debt repayment obligations to the International Monetary Fund, which currently stands at about $200 billion.