MercoPress. South Atlantic News Agency

Argentine economy forecasted to grow 6.5% according to Central bank

“Internal demand leads economic growth” said the official report

The Argentine economy is poised to expand by 6.5% or more this year, and unemployment may hover at the lowest level in two decades, the central bank said.

“Internal demand has returned to lead economic growth,” the central bank said the bank’s report which cited first quarter growth in industrial production and the construction industry.

The central bank thus joins analysts at companies including Goldman Sachs Group Inc. in raising its forecast for growth in Argentina. Goldman said in March that Argentina’s GDP may expand 6.8% this year, up from an earlier estimate of 5.6%. The government had forecast 4.3% growth in its 2011 budget.

Argentine unemployment fell to 7.3% in the fourth quarter, the lowest in at least nine years, the government reported in February. Sales of central bank notes absorbed 80% of the growth in the country’s money supply resulting from the purchase of dollars in the first quarter, the bank said.

In related news Argentina’s the ICC consumer confidence index soared 1.2% in April, in comparison to February, according to a report by Mercado Foundation. In comparison to April 2010, the ICC consumer confidence index increased 8.4%.

The increase of the consumers’ confidence is due to the increase of economic and job expectations. The income expectations hiked 2% whereas inflation expectations increased 7.9%.

Next October Argentina is holding presidential elections and the good performance of the economy is virtually ensuring President Cristina Fernandez’ re-election once she announces her bid.