Argentina can grow more, needs capital markets-IMF

SANTIAGO, Oct 27 (Reuters) - Argentina is well-positioned to reap the rewards of high commodity prices but needs to arrange for a return to international capital markets in order to boost domestic spending, the IMF said on Tuesday.

"Argentina is in a situation in which it has a lot of growth prospects, but it has to do a few additional things," Nicolas Eyzaguirre, director of the IMF's Western Hemisphere department, told reporters in Chile after a presentation.

"It benefits from the point of view of export prices, but it isn't achieving the full reinsertion in capital markets that is required to be able to expand domestic spending, both private and public," he said.

Argentina last Thursday announced plans to settle a dispute with holders of some $20 billion in defaulted bonds who did not accept the country's controversial debt restructuring in 2005.

The government hired Barclays (BARC.L), Citi (C.N) and Deutsche Bank (DBKGn.DE) to carry out the deal, seen as essential for the South American country to be able to tap international markets and close a financing gap.

Eyzaguirre said Argentina would be more successful in foreign markets if it subjected itself to an IMF review of its economy. IMF Article IV reviews are conducted annually in each of the fund's member countries, although Argentina has refused to do one in more than three years.

"It needs to renegotiate with creditors that didn't participate in the previous restructuring ... they need to fix things with the Paris Club," Eyzaguirre said.

"It would help with all of this if they had a new Article IV consultation with the fund, because that is what markets normally look at most closely when it comes to deciding whether or not they are available to lend," he said.