Argentina Minister: Economy To Exceed Estimates In 2010

Source: Dow Jones Newswires
By: Matthew Cowley

01.27.2010

BUENOS AIRES -(Dow Jones)- Argentina's economy will exceed expectations in 2010, Economy Minister Amado Boudou said Wednesday, in an interview broadcast on Radio Mitre.

"2010 will be a year with growth above estimates," Boudou said. "There is going to be lots of tranquility in the functioning of the economy."

Part of the audio was published on the Economy Ministry's Web site.

The government's official forecast in the 2010 budget is for 2.5% expansion of gross domestic product in 2010, although in late December the minister said growth could be as much as 7%.

A number of economists expect growth to pick up again in 2010, after stagnation in 2009, though the most optimistic forecasts at the moment suggest that could be around 5%. There is a worry that a return to strong growth could lead to a rise in inflation.

The central bank's latest monthly survey of economists pointed to a median estimate for official growth of 3.3% in 2010.

Nevertheless, many private-sector economists question the economic growth data. They claim the government has manipulated the data to make growth appear rosier than it is since intervening in the national statistics agency in early 2007.

While President Cristina Fernandez has said growth was around 0.9% in 2010, most private sector economists believe there was a significant recession in 2009.

Boudou said a three-week dispute with the central bank and the opposition over the use of foreign exchange reserves to pay down debts hasn't impacted the economy.

"In the midst of this whole farce ... we have maintained the economic variables with lots of tranquility," Boudou said.

"We would like to have continued to lower the country risk and the rise in Argentine bonds," Boudou said. "We're retaking that this week."

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