IMF Admits Mistake in Argentina

A self-evaluative report issued by the IMF stated that there was no one single cause for the 2001 crisis. Contributing factors were: the state debts of Argentina, increasing budget expenses, the peso’s falling value against the dollar, and the private sector’s continuing to give debt despite economic stagnation in 1998. The IMF also accepted that they failed to see the problems that the country was likely to experience. The IMF failed to see the real position of Argentina’s economy.

Argentina’s debt default in 2001 triggered the economic crisis and drew half of the population into poverty. International loan foundations put a stop to Argentina’s borrowing until it made a new $13.3 billion agreement with the IMF in 2003. Most Argentinians still blame the IMF for their continuing economic problems.

Argentina paid off its more than $3 billion debt to the IMF and has opened a way for a new $3.1 billion credit in early March. The private sector in Argentina still owes a total of $88 billion to foreign institutions.