59 ms·
Argentina didn't decide. It couldn't pay the interests anymore. It was a snowball of crazy high interest rates in a foreign currency. You can't pay your debt if
by alecco 10y ago
Argentina didn't decide. It couldn't pay the interests anymore. It was a snowball of crazy high interest rates in a foreign currency. You can't pay your debt if it's much higher than GDP growth even with a surplus. And Argentina had neither growth nor surplus, thanks to the idiotic IMF economic plans with a currency pegged to the US dollar.
A better point might be, why were they lent money in the first place?!?
- Mindcraft 10y agoAnd to a de-facto government.
- lambertsimnel 10y agoDebt to GDP ratios can also be described in terms of how long it takes to produce GDP equal to the debt. Owing 100% of GDP is owing one year's product. Whether that's a significant dividing line depends on rates of interest and growth.