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 percent in 2019.

"It is not the same as 2001, but it is similar. At that time poverty was at 57 percent, 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 $100 billion.

Protests over the Argentinian government's economic reform plan broke out in the capital Buenos Aires last week
Protests over the Argentinian government's economic reform plan broke out in the capital Buenos Aires last week AFP / RONALDO SCHEMIDT

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

The president obtained political support from Congress on Saturday with the approval of an economic emergency law that will take effect on Monday.

It includes increasing taxes on the upper and middle classes, improving benefits for the most deprived sectors, and imposing a 30 percent tax on buying and selling currencies.

Fernandez maintained the monthly $200 limit of buying foreign currency imposed by Macri last August, noting American dollars are now scarce in Argentina -- and expensive.

"We have to end this practice of saving in dollars," he said, referring to the historical habit of Argentines, who buy the dollar as a refuge currency against the country's inflation.

Argentina has an annual inflation of 55 percent, and a debt of almost 90 percent of its GDP.

Argentina