With the July 30 deadline looming, Argentina has just days to deal with the fallout of its previous 2001 default, which plunged Latin America’s third-largest economy into a crisis. The South American country has to pay $1.5 billion to hedge funds demanding full payment of its bad debts. Under a US court order, it cannot pay its other creditors without also paying the hedge funds. The Argentinian authorities asked the US court to allow it to make an interest payment due on the restructured bonds. If the nation does not do it, a technical default will become real. The court rejected the request of Argentina’s representatives and ordered them to meet with creditors and the court-appointed mediator for negotiations. But so far, there has been no progress in talks, and at a court hearing in New York, the Argentinian part said that it is impossible to come to an agreement even if the negotiations last around the clock. According to analysts, in the event of default, the aftermath for Argentina will be heavy. The country's economy is already in a recession, and its inflation rate is one of the highest in the world. According to the forecasts of economists, the indicator would reach 40% by the end of the year. According to the calculations, if the country avoids default, its economy will shrink by 1-1.5% this year, and in case of default, it will lose 2.5%. In addition, the second devaluation of the Argentine peso is very likely this year. If default is not an option, it will inspire investor confidence. Then the flow of foreign direct investment into the country will increase by $5 billion per year. In particular, investors should be interested in one of the biggest shale reserves of the Vaca Muerta field.
