MercoPress. South Atlantic News Agency

Argentine economic activity expands 11.1% in June over a year ago

Mrs Kirchner boasting the success of Argentine economic performance

Argentina’s economic activity expanded 11.1% last June compared to the same month a year ago, anticipated President Cristina Fernandez de Kirchner during the celebration of the 126th anniversary of the Rosario Chamber of Commerce.

“On Friday we will be announcing the official figures of economic activity. Numbers which reflect the vitality of our growth, which has not been easy to sustain”, said Mrs. Kirchner.

While some countries in the region are taking measures to cool excessive growth, the Argentine economy continues to advance at great leaps. “We have been the second country that most fiscal measures implemented to address the international crisis according to the UN”, added the president.

“This year’s estimated 9% crowns the longest period of sustained growth in the country’s 200 year history”, emphasized Mrs. Kirchner adding that “this together with a one digit unemployment rate that in the last quarter was down again standing at 7.9%”.

The president also underlined the current conditions of the farming sector.

“We won’t have to import milk, meat or wheat as was said by interested groups. We have liberated 3 million tons of wheat for export, because we knew we would have a crop of 12 to 13 million tons”.

During the ceremony Mrs Kirchner was accompanied by the governor of Santa Fe Hermes Binner; the president of the Chamber of Commerce, Christian Amuchastegui and the ministers of Economy and Agriculture Amado Boudou and Julián Domínguez.

Minister Boudou also assured that Argentina “isn't looking for, nor has any need of issuing debt,” and added that “there's no urgency to do it”.

“This move parallels to the foreign debt-swap” remarked the Economy minister, “and when we do so it will be at rates significantly lower than those for the private sector” (less than two digits).

When asked about the possible decision to discuss a debt-restructure with the Paris Club, Boudou stated they are “evaluating a solution that's convenient both for Argentines and creditors.”

Argentina debt commitments, capital and interest, for 2011 are in the range of 8 billion US dollars (after paying multilateral organizations and Argentine institutions such as the Central Bank and Pensions Fund)

Boudou concluded by saying that Argentina's economic growth “is coming up strong” and admitted the Government is “surprised by the country's growth happening month to month”.

The scenario was confirmed by credit-markets showing that Argentina’s debt is less risky than Greece for the first time in seven weeks as the country’s economy is set to grow at the fastest pace since 1992.

The cost of protecting Argentine debt against non-payment for five years with credit-default swaps fell 12 basis points, or 0.12 percentage point, to 821 this week, 22 less than similar contracts for Greece, according to CMA DataVision.

Argentine credit risk is estimated to remain below Greece as surging commodity exports boost tax revenue according to Wells Fargo & Co. Argentina’s economy is forecast to grow 9.7% this year by Morgan Stanley, the fastest in the region.

Furthermore Argentina’s budget deficit will equal 0.1% of GDP this year, according to Morgan Stanley, which revised its estimate lower from 1% earlier in the month. Argentina debt ratio to GDP last year stood at 49%.

A record 55 million-ton soybean harvest helped the central bank boost reserves to an all-time high of 51.1 billion US dollars in July and pushed tax revenue 39% higher in June from a year earlier to 37.3 billion pesos.