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AmericasJanuary 3 2005

Argentina faces long and slow haul to recovery

Argentina’s recovery from its debt default is likely to be slow and investors’ lack of confidence over contractual law is not helping. Jason Mitchell reports from Buenos Aires.Argentina will probably reach an accord with its international creditors next year but is likely to suffer the consequences of its debt default for many years as investment flows stall, productivity falls behind competitor countries and interest rates remain high, which will hamper growth.
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High rates persist

According to Agustín Etchebarne, a partner at Delphos Investment, a Buenos Aires-based fund manager: “This country has defaulted on its international debt seven times since it gained independence in 1816. I think that after the latest default, Argentina will have higher interest rates for a generation.”

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