Argentina is in 'virtual default' says president

Argentina's President Alberto Fernandez said Sunday the South American country is in virtual default and compared the situation with the 2001 crisis -- the worst in its recent history.

The country is in recession and has suffered 18 months of economic crisis sparked by a currency crash. Its economy is expected to shrink by 3.1 per cent in 2019.

"It is not the same as 2001, but it is similar. At that time poverty was at 57 per cent, today we have 41 percent poor people; then we had a debt default, today we are in virtual default," Fernandez said in an interview with TV program La Cornice.

The center-left president came to power on December 10 after defeating liberal Mauricio Macri in the presidential election, and has previously expressed his willingness to pay creditors.

But on Friday the government unilaterally postponed until August paying some 9 billion dollars in maturities, which resulted in the country's debt being downgraded by rating agencies Fitch and S&P, who consider it in selective default.

"This is what we inherited. We cannot face this by paying the obligations that are falling. We used to have high unemployment, and today we have the same," Fernandez said, drawing a comparison with the 2001 crisis when Argentina defaulted on USD 100 billion.

"What we did not have is the inflationary process that we have now."