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Argentina's robust economy reflected in August tax revenue

Thursday, September 6th 2007 - 21:00 UTC
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August tax revenue in Argentina was a higher-than-expected 17.87 billion pesos, (almost 6 billion US dollars) rising 37.4% from the same month last year, partly due to big jumps in sales and income tax revenues, reported Economy Ministry.

Buenos Aires analysts had forecast August tax revenue at 17.36 billion pesos. Revenue in August 2006 was 13.01 billion pesos. Argentina's Economy Ministry published the data one day later than scheduled, but did not provide an explanation for the delay. Income tax revenue rose 33% in August from a year earlier, while sales tax revenue rose 43%, the ministry said in a statement. The Argentine economy is in its fifth year of robust expansion, which has pushed consumer spending. Economists also say inflation, which ran almost 10% last year, has boosted tax revenue. Export tax revenue rose 21%. Argentina's agricultural exports, such as soy, wheat and corn, are enjoying high global prices. Social security revenue rose 54% as workers responded to a pension system reform allowing hundreds of thousands of people to shift to the state system from private pension funds. In related news Argentina's head of the National Development and Investment Agency Beatriz Nofal announced that construction and real estate sectors investments this year will be totaling 8.3 billion US dollars. The construction industry has been one of the locomotives of the current Argentine strong growth, basically fueled by investors who mistrust banks and the financial system following the 2001/02 default and melting of the economy. However that boost seems to be slowing down and there is a growing housing demand for potential buyers who can only afford the down payment. Businessman Eduardo Gutiérrez, who heads the Farallón Group, warned about the need for mortgage loans to revive the domestic market, adding that until that occurs it is necessary to attract foreign investors to buy high-quality properties in Argentina. Nofal also announced an international real estate congress that is to be held in Buenos Aires in December following the model of the Madrid Real estate Salon. "The US subprime mortgage crisis and the Spanish property bubble are opportunities for Argentina. This idle capacity, (referring to investments) can be invested here" underlined Gutiérrez.

Categories: Economy, Argentina.

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