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Thursday, 18 April, 2002, 16:18 GMT 17:18 UK
Argentina pleads for financial aid
A mass protest in Buenos Aires
Argentine workers do not want budget cuts
Argentina's economy will shrink even further this year, the International Monetary Fund has warned.

The country is suffering a severe financial crisis, and the IMF says a significant reduction in output and an acceleration in inflation appear unavoidable.

Jorge Remes Lenicov, Argentine economic minister
Jorge Remes Lenicov wants financial help

The organisation is predicting that Argentina's economy will shrink by 10-15% this year.

Argentina's economy minister is meeting officials in Washington to try to find ways of easing his country's problems.

Greater woes

Jorge Remes Lenicov is asking the US and the International Monetary Fund (IMF) for financial support.

The IMF says a lot will hinge on the economic programme currently being negotiated.

But Argentina's president, Eduardo Duhalde, has warned that the proposed programme is "not sustainable" and could send Argentina down a path toward "greater woes".

Under the programme, Argentina would have to make budget cuts, a prospect that has angered many Argentines.

Mass protests by workers demanding their unpaid salaries began on Wednesday and have been continuing.

Runaway spending

In La Plata, the capital of Buenos Aires province, police fired rubber bullets to break up a demonstration of 400 workers.

In San Juan, a small province at the foot of the Andes, demonstrators broke windows and occupied a government building.

Horst Koehler, head of the IMF
Horst Koehler is getting tough with Argentina

The protests marked the end of two weeks of talks between the Argentine government and the IMF.

After the discussions, the head of the IMF mission, Anoop Singh, renewed calls for Argentina's provinces to end decades of runaway spending.

The head of the IMF, Horst Koehler, said: "The IMF is not asking for the impossible."

He told Argentina's provinces and government to "face reality" and cut jobs.

Mr Koehler said that if an agreement was reached with the provinces about their spending then he was optimistic the IMF could back Argentina.

See also:

18 Apr 02 | Business
IMF upbeat on world economy
04 Apr 02 | Business
Argentina battles spread of poverty
25 Mar 02 | Business
Argentina imposes new forex controls
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