MercoPress. South Atlantic News Agency

Argentina expects 3% growth in 2003

Budget estimates for 2003 anticipate the Argentine economy will grow 3%, annual inflation should not surpass 45% while debt payments to multilateral financial organizations will be equivalent to 4 billion US dollars.

The budget presented to Congress this week by Economy Minister Roberto Lavagna doesn't contemplate capital or interest payments to private holders of Argentine bonds.

Argentine government revenue in 2003 is estimated in the equivalent of 21,209 billion US dollars a 47,8% increase over 2002, with a primary surplus of 3,22 billion US dollars, equivalent to 2,18% of GDP. However the final deficit, after repaying loans and interests, is estimated in 890 million US dollars. Domestic consumption is anticipated to grow 3,2% and investment 10,5%.

The budget assumes that in 2003 Argentina will be able to reverse four years recession, that consumption will pick up based on a rather stable exchange rate, in the range of 3,70 pesos to the US dollars, and export levies on overseas agricultural commodities sales. Government expenditure is estimated in the equivalent of 18,3 billion US dollars, a 39,8% increase over 2002, particularly in social security and defence.

Argentina last January defaulted on a foreign debt of 132 billion US dollars and since then is desperately striving to regain international credit. Unemployment stands above 22%, and 53% of the population are described as living below the poverty line.

The budget presentation coincided with the release of the latest figures on August industrial production that dropped 6,5% compared to a year ago. However there's a slight increase of 2,7% over July 2002, according to the Argentine Statistics and Census Office.

In the first eight months of the current year industrial production accumulates a 15,5% contraction. Seasonably adjusted industrial production dropped 7,5% compared to a year ago and increased 2,1% over last July.