Argentina reported a monthly primary budget deficit for the first time in three years pushed by higher social security spending and subsidized loans for small businesses.
The primary budget deficit, which excludes interest payments, was 1.2 billion pesos (380 million US dollars) in December, down from a surplus of 1.9 billion pesos in November, the economy ministry said Wednesday in a statement in Buenos Aires. However Argentina reported an overall 2007 surplus of 25.7 billion pesos, about 3.2% of gross domestic product, GDP. "A surplus of more than 3% is unprecedented in Argentina's history" Treasury Secretary Juan Carlos Pezoa told reporters at the ministry. "We're convinced that in 2008 we're going to have the surplus necessary to sustain growth". Argentine President Cristina Fernandez de Kirchner has said that maintaining a budget surplus and a cheap peso helped Argentina recover from a financial crisis in late 2001, when South America's second-largest economy defaulted on about 95 billion US dollars of sovereign bonds. Deputy budget secretary Raul Rigo attributed the December deficit in part to higher social security spending as more citizens switch to government plans from the private sector and on programs to benefit small and medium-sized companies.