MercoPress. South Atlantic News Agency

Argentina’s primary surplus falls for seventh month running

June also registered a fiscal deficit

Argentina's primary budget surplus plunged 65% in June compared to year earlier, marking the seventh straight month of worsening budget results, the government said on Monday.

The primary surplus, which measures the government's budget surplus before making debt payments, fell to 909 million pesos (approx. 235 million USD) last month from 2.65 billion pesos in June 2008.

The figure is seen as a key gauge of a country's ability to service its debt and is especially important for Argentina, which has been locked out of international capital markets since it staged a massive sovereign default in 2002.

The poorer primary budget balance is linked to persistent public spending in the run-up to a June 28 election. After debt payments, the country registered a fiscal deficit of 1.64 billion pesos in June compared with a surplus of 1.26 billion pesos for the same month a year ago.

“I want to highlight the importance of this result, given the international context,” Economy Minister Amado Boudou told reporters.

Argentina faces 20 billion US dollars in debt payments through the end of 2010 just as a slowing economy cuts into tax revenue growth.

Boudou, who was sworn in after the mid term election of June 28th, has said he expects the country to close 2009 with a fiscal surplus.