MercoPress. South Atlantic News Agency

Argentine economy grows 8.4%; unemployment down to 9.8%

“No risk that the global financial crisis can reach Argentina” said Economy Minister Peirano

The Argentine economy expanded 8.4% during the first half of 2007 compared to a year ago reported Friday the country's Statistics and Census Office, Indec. President Nestor Kirchner also announced that unemployment in the second quarter of 2007 dropped to 8.5% of active population.

In spite of the energy crisis, Indec's figures show that the economy last June grew by 8.3% and 0.7% over the previous month of May. Basically this means that the economy in the second quarter was slightly more dynamic than in the first quarter when expansion was 8%. The 8.5% unemployment index marks a significant advance over the 10.4% of the same period in 2006, said president Kirchner. In the first quarter of the year unemployment stood at 9.8%. "The second quarter will end with unemployment in the range of 8.5% compared to 10.4% a year ago, which is clear evidence of how strongly the Argentine economy is evolving", revealed Kirchner during a political rally in support of his wife Cristina Fernandez de Kirchner who is the official candidate for the coming October presidential election. From Government House Argentina's Economy minister Miguel Peirano underlined that "there's no risk that the global financial crisis can reach Argentina. We have a strong consolidated budget surplus and so is economy activity for the fourth year running above 8%". But in spite of the rosy comments from Argentina's top officials, the Central Bank had to pump liquidity into the market following the plunge on Thursday and accumulated losses in the Buenos Aires Stock Exchange. Furthermore as happened in 2001/02 when the melting of the Argentine economy people begun queuing to buy US dollars. However news that the Federal Reserve had lowered rates to banks and hopes that this could extend to include September's prime rate decision helped change the situation with the Buenos Aires market closing with a 5% gain.