MercoPress. South Atlantic News Agency

Argentina bolsters size of the stimulus package to 32 b. USD

Pte. CFK launch the “most ambitious public works plan in memory”

Argentina will spend the equivalent of 16.6 billion USD on infrastructure projects next year in an attempt to create 380,000 construction-related jobs it was announced Monday in Buenos Aires.

Argentina's Public Works Secretary, Jose Lopez said during a national televised press conference that President Cristina Fernandez de Kirchner administration goal is to boost spending on public works to 111 billion pesos (32 billion USD), up from the 71 billion-peso plan announced last November 26. However he was quick to point out that about 57 billion pesos of the stimulus package (up 50% from last year) will be spent next year on projects ranging from schools to highways, Lopez said. "Through this investment we want to generate a strong anti- cyclical reaction that will allow us to create more jobs, boost activity throughout the construction sector and give a better quality of life to our people" Lopez said at the presidential residence in Olivos. The increase in public works spending is the latest effort by Mrs. Kirchner's government to re-launch an economy that Wall Street analysts say is showing signs of "sharp decline." After five years of strong economic growth, South America's second-largest economy is confronting the cooling effects of the international financial crisis. The government says the economy will slow to 4%, while analysts estimate growth of little more than half that. Mrs Kirchner on December 4 unveiled a 13.2 billion peso stimulus plan to finance purchases of cars and home appliances and a 300 million peso plan to stimulate domestic tourism on December 11. The president described the "most ambitious public works plan in memory" will be a record 5% of 2009 economic output, up nearly 2 percentage points from this year. She acknowledged that the financial crisis prompted the government to bolster the size of the stimulus package, but insisted there was no emergency at hand. According to Lopez of the promised 111 billion pesos, 71 billion were already accounted for partly in next year's budget, plus private sector contributions, cutting subsidies and loans from state-run Banco Nacion and the newly nationalized pension funds assets. As to the remaining 40 billion pesos (12 billion USD) Lopez said the government was seeking additional financing to fund separate infrastructure projects, without saying where they would come from or giving a time frame. Later in the evening President Cristina Kirchner said the plan will raise employment in the construction industry to 780,000 people from 400,000 people and also announced an additional one-time payment of 200 pesos to retirees this month.