Argentina's government will need "substantial debt relief" from private creditors as the coronavirus pandemic and its economic impact exacerbates the country's financial situation, IMF chief Kristalina Georgieva said Friday.

The nation already had been dealing with an economic crisis and Georgieva said, "Tackling these issues has become even more pressing in light of the coronavirus pandemic and its significant health and economic impact."

International Monetary Fund staff "analysis shows that considering this debt-carrying capacity, and the existing debt burden, a substantial debt relief from Argentina's private creditors will be needed to restore debt sustainability with high probability."

Argentina last week finalized a proposal to restructure some $69 billion of the country's massive public debt, hoping to delay the maturity of some institutional loans and reduce the amount owed to private creditors.

Since taking office in December, President Alberto Fernandez's administration has insisted it will not be able to pay off its creditors if its recession-hit economy fails to resume growth.

The IMF staff was blunt in its assessment.

IMF Managing Director Kristalina Georgieva said the fund's priority is to support Argentina and restore a stable economy
IMF Managing Director Kristalina Georgieva said the fund's priority is to support Argentina and restore a stable economy AFP / NICHOLAS KAMM

"Argentina's public debt, which stood at near 90 percent of GDP at end-2019, is unsustainable," the technical analysis warned. And getting public finances to a level where it could manage the debt "is not economically or politically feasible."

The country is struggling with inflation of more than 50 percent, a major currency depreciation and a poverty level that has soared almost to almost half the population after nearly two years of economic downturn.

In 2001 Argentina defaulted on payments on nearly $100 billion of its external debt, but has since paid some back in the form of large swaps.

Argentina currently owes $311 billion with more than $30 billion in repayments due before the end of March.

That includes a deeply unpopular $57 billion bailout loan from the International Monetary Fund negotiated by Fernandez's center-right predecessor Mauricio Macri in 2018.

The fund has itself come in for criticism for repeatedly coming to the rescue of a country that has faced serial financial crises.

Georgieva said the IMF's "priority is and remains helping support Argentina's recovery with a particular focus on those that have the least and are most exposed. Ultimately, our objective is to pave the way for a stable and prosperous economy."