Argentina - The Crisis that Isn't

Argentina , the crisis that isn't...says non-biased thinktank based in Washington, USA. Funded by non-profit organizations like Ford Institution and such, Co-Director Andrew Weisbrot writes:

“In their most recent (August 26) analysis of Argentina’s debt, Morgan Stanley also takes $20.2 billion for the starting point of total debt service for 2009.3 However, they note that $5.5 billion of this is likely to be rolled over without problems, leaving only $14.7 billion to be financed. Of this, they project a primary surplus of $8.7 billion. They project $1.8 - $3 billion to be financed from pension funds, and take the lower number; and $2.1 billion from a reduction in the rate of growth of energy subsidies.

This would leave Argentina with only $2.1 billion to cover from either borrowing from Venezuela – as ithas done in recent years – or financing from savings or reserves.

Morgan Stanley estimates that theArgentine government has at least $6-7 billion in savings, in addition to $47 billion in reserves. Even taking into account that the government has now decided to pay off its $6.7 billion debt to the ParisClub,4 this is quite a bit of savings and reserves relative to any potential shortfall.

Beyond 2009, Argentina’s debt service as a percent of GDP falls significantly and steadily. This can be seen in Table 1. It falls from 6.31 percent of GDP in 2009, to 4.19 percent in 2010, then rises slightly 4.54 percent in 2011, and then declines steadily. It is clear that 2008 and 2009 are the “hump” years. There is no obvious trouble once these years have passed."

Full link here
http://www.cepr.net/documents/publications/argentina_2008_10.pdf