Argentina's economy is expected to grow 6.2% next year, while GDP in 2013 is forecasted to expand 5.1% boosted by a massive grains harvest and the automobile industry, Economy Minister Hernan Lorenzino said on Thursday while presenting the 2014 budget bill before Congress.
Argentina grew just 1.9% in 2012 after expanding 8.9% in 2011, according to official data. This reflected weak global demand for its exports, a poor grains harvest, high inflation and the negative impact of currency and trade controls on investment.
President Cristina Fernandez has implemented protectionist trade policies, currency controls and heavy regulation of the country's key grains sector, making her popular among many of the urban poor but frustrating the business sector.
She also imposed currency controls to stem capital flight and safeguard the central bank's foreign reserves.
It's precisely these policies that we've been implementing, that protect the domestic market and Argentine jobs..., which have allowed Argentina to grow, amid the most profound global crisis since the 1930s, Lorenzino told Congress.
Argentina's forecast 2013 growth is set to beat the regional average. The economies of Latin America and the Caribbean are seen expanding 3% this year, as a gloomier global economy restrains exports and domestic demand, the United Nations Economic Commission on Latin American and the Caribbean said in July.
Creditors were eagerly awaiting the 2014 budget estimates to see if growth would be strong enough to trigger payouts to holders of billions of dollars in Argentina's GDP warrants.
Growth of at least 3.03% is needed in 2014 for Argentina to pay holders of its GDP warrants in December 2015. GDP-linked warrants shot up after the announced forecasts.
The government intends to use around 9.8 billion dollars in central bank reserves to pay foreign currency-denominated debt, which is higher from an estimated 9.3 billion this year.
Argentina’s trade surplus is seen at about 10.1 billion next year, slightly down from this year's forecast 10.6bn. The budget bill foresees 10.5% inflation this year and 9.9% in 2014. Private inflation estimates, however, hover closer to 25% a year according to the Congressional index.
Latin America’s third largest economy foresees a primary budget surplus of 2.59% of GDP next year. The exchange rate is seen at 6.33 Pesos per US dollar in 2014. On Thursday, the currency was trading at 5.72 per dollar at the official exchange rate and 9.26 Pesos per dollar in the black market.
However a week ago the Central bank president said the Argentine economy was likely to expand 4% this year. The bank’s president Mercedes Marco del Pont in a television interview indicated that the economy will out-perform a much weaker expansion last year, when it grew 1.9%, according to Indec, the official stats office, and said 4% was a good guess.
The Argentine economy expanded 5.1% in the first half of the year again according to the much questioned Indec.
Still, many economists say Indec data exaggerate economic growth by as many as two or three percentage points. Critics say the agency vastly underestimates inflation and as a result skews economic growth data. A recent survey of analysts by FocusEconomics put Argentine economic growth at 3.6% this year and at 2.6% next year.
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What a load of bullshit.Sep 13th, 2013 - 04:11 am 0
Even die-hard patriots can surely not believe these figures. I find it so amazing that the Argentine government doesn't realise how farcical it sounds when it produces figures such as these.
No one is hurt more that Argentina by lying about growth and inflation.
As for Latin America’s third largest economy......
Haha NOT! That would now be Colombia. And at this rate and with these rubbery figures Argentina will soon be behind their hermanitos shilenos over the Andes.
Wow. That's pretty brazen as wholly invented numbers go.Sep 13th, 2013 - 04:58 am 0
It makes you wonder how they come with them. A sacrificial chicken on a ouija board or the more traditional dartboard?
For a country to achieve such growth based on a bumper harvest, it would have to be a largely agrarian economy.Sep 13th, 2013 - 09:07 am 0
So if these numbers are true, the Ks have failed to diversify the economy and move up the food chain.
If the numbers are false, then Mrs K will have to explain why there is so much poverty when they have have such robust growth.