MercoPress. South Atlantic News Agency

Argentina economy “more vigorous than ever” says Minister

Minister Fernandez suffers inflation optimism

Argentine Economy Minister Carlos Fernandez told exporters the country's economy is “more vigorous than ever” and confirmed the current “economic productive model”,' one week after the government began buying back its own bonds to shore up waning investor confidence.

"All sectors of the economy are growing" Fernandez said on Wednesday in a speech to the Argentine Exporters Chamber in Buenos Aires. "This is the result of our commitment to a competitive exchange rate, fiscal and trade surpluses and the accumulation of international reserves". Fernandez forecasted that exports in 2008 would increase 29%. "This year Argentine exports will reach 72 billion US dollars compared to 26 billion in 2002. Obviously international prices have helped but the volumes are also increasing strongly". However doubts about Argentina's inflation data and slowing economic growth have eroded confidence in South America's second-largest economy. Argentina bought back 270 million US dollars in bonds last week, after the debt fell for seven straight days. Argentina reported a budget surplus excluding interest payments of 1.3 billion US dollars in July and a trade surplus of one billion. The announcement was done on Tuesday by President Cristina Fernandez de Kirchner. "The data is convincing", said Fernandez and "we're working to keep it that way" This economic project "is more vigorous than ever. Recent data is demolishing and we are working to take advantage of all the possibilities and opportunities". The Argentine government since 2002 supports a weak nominal exchange vis-à-vis the US dollar to promote exports plus multiple subsidies to keep the economy running at over 8% annually in the last five years. But it's also true that Standard & Poor's lowered Argentina's foreign debt rating to B, five levels below investment grade last August 11.