MercoPress. South Atlantic News Agency

Global crisis reaches Argentina’s shores “but we are going to have a good year”

Lorenzino said Argentina has sufficient reserves to address to prevent speculative attacks

Argentina’s Economy Minister Hernán Lorenzino admitted on Thursday that the global economic crisis has had an impact on the country but nevertheless “we are going to have a good year”.

He also revealed Argentina is working to reach an agreement with the Club of Paris of sovereign creditors and that it will continue the use of the central bank's international reserves to pay creditors.

“We are going to have a good year. We are going to grow... we are going to continue creating jobs and continue to maintain a robust internal market, even when the wind coming from international markets is not a positive one” Lorenzino said in an interview with a local Buenos Aires radio.

Lorenzino further stated that ”this negative economic wind does not imply that that our vision for the year’s progress will cease to be optimistic. The President (Cristina Fernandez) has mapped out the economic path very clearly, with plans for growth and social inclusion which in many cases succeed other countries.“

Asked about the international debt crisis in the EU, Lorenzino recalled that Argentina had a similar situation plus the political determination to stand up before creditors and renegotiate debt “in a way we believed was sustainable for the economy of the country and that is why debt today is no problem for Argentina”.

“There are no outside limits to our agenda and it is clearly understood that our situation is entirely manageable with our international reserves and our treasury accounts”, highlighted Lorenzino who also ruled out any significant movements in the exchange rate this year.

”The central bank has an enormous ability to regulate the foreign exchange market. It has more than enough reserves to prevent any speculative attacks and it has done so,“ he said. ”Today the dollar is stable and will continue to be stable with our managed exchange rate policy.“

Asked about Argentina's negotiations with the Paris Club, Lorenzino said that talks continue. ”Argentina will always look for a solution to its debt is always acceptable, and sustainable, for our country's interests. In that sense we continue working with our creditors with this objective in mind,” he said.

Argentina restarted talks to settle its debts with the Paris Club of creditor nations in late 2010. But a solution has so far proved elusive with media reports indicating that club members want a shorter repayment period than Argentina is willing to accept.

Last September, Argentina said in a filing with the US Securities and Exchange Commission that it owes the Paris Club 6.3 billion dollars in principal and interest as well as an estimated 2.6 billion in penalty interest.

The IMF this week trimmed Argentina’s 2012 world growth forecast to 3.3% from 4%, saying the global economic recovery is threatened by financial turmoil and recession in the Euro area. The Central Bank of Argentina has estimated growth of between 4.5% and 7.5% in 2012.