Argentina Aug primary surplus up 23 pct from yr ago

Sep 24, 2007 - Argentina's August primary budget surplus expanded 23 percent from a year ago due to greater social security inflows as well as robust revenue from sales and trade taxes, the government said on Monday.

The primary surplus rose to 2.72 billion pesos ($854 million) from 2.21 billion pesos a year earlier, Economy Minister Miguel Peirano told reporters.

The figure came in above the median forecast of 2.55 billion pesos given in last month's central bank survey.

The primary budget surplus represents excess government revenue over expenditures before interest payments and is seen as a gauge of a country's ability to service its debt.

Argentina targets a primary surplus this year of 2.96 percent of gross domestic product and a surplus of 3.15 percent of GDP next year, according to the government's 2008 budget bill.

President Nestor Kirchner said this month that his wife, a prominent senator and the front-runner in Argentina's presidential race, would aim for a primary surplus of at least 4 percent of GDP if she were to win the Oct. 28 election.

Government spending levels have shot higher during this election year, outpacing growth in revenue. ($1 = 3.185 Argentine pesos)

Argentina 2008 budget sees 7.3 pct inflation

Sep 17, 2007 - Argentina's 2008 budget bill, presented to Congress on Friday, sees annual inflation of 7.3 percent and calculates gross domestic product growth at 4 percent.

Inflation is expected to average 7.7 percent over the course of 2008.

Latin America's number-three economy is in its fifth straight year of expansion at about 8 percent. In the country's 2007 budget bill, the center-left government of President Nestor Kirchner had also underestimated growth.

The strategy has allowed the government to announce economic results that have exceeded the budget's stipulations.

A central bank survey carried out among analysts last month gave a median outlook for 2008 growth of 6.2 percent, with inflation for the year estimated at 10 percent.

High inflation has dogged Kirchner's government. Last year's budget included estimates for inflation in a range of 7 percent to 11 percent.

Inflation has come in below market expectations since January, when the government replaced the head of the consumer price unit at INDEC, the national statistics unit, with a political ally, prompting fears of government meddling with the data.

As a result, investors have become increasingly wary of the country's inflation-indexed bonds, which account for more than 40 percent of total public debt.

Inflation in the first eight months of the year stands at 5 percent, with 12-month inflation through August of 8.7 percent.

In relation to the local currency, the budget bill for next year envisages an exchange rate of 3.21 pesos per dollar. The peso closed on Friday at 3.1950/3.1975 against the dollar in informal trade as measured by Reuters.

The budget will be in force for the first year of a new government following a presidential election on Oct. 28. First lady and senator Cristina Fernandez de Kirchner has a wide lead in opinion polls.

It calculates a primary budget surplus of 3.15 percent of gross domestic product and a $10.06 billion trade surplus.

Official details of the bill broadly confirmed those given by an Economy Ministry source earlier this week.

Argentina's July primary surplus jumps 23 pct yr/yr

Aug 22, 2007 - Argentina's July primary budget surplus widened 23 percent to 2.58 billion pesos ($804 million), due in part to pension contributions shifted to the state system, the government said on Wednesday.

The figure, which excludes interest payments on Argentina's debt and is seen as a gauge of the country's credit-worthiness, was well below the median forecast of 3.0 billion pesos given in last month's central bank survey.

After debt servicing, the budget surplus was 1.52 billion pesos, the Economy Ministry said in a statement.

A reform to the pension system allowing Argentines to switch from private plans to the government program has boosted state revenues. Sales, income and export taxes also contributed to higher income, the government said.

Spending on social security rose in July, as did capital spending. Payments to the body that administers the wholesale electricity market also rose as especially-cold weather during the austral winter caused demand for power to surge.

Argentina's primary surplus totaled 2.09 billion pesos in July 2006. ($1 = 3.2075 Argentine pesos)

Argentina economy grew 8.3 pct in June from year ago

Aug 16, 2007 - Argentina's economy grew 8.3 percent in June from a year ago and 0.7 percent from May, beating market expectations and marking the country's 55th straight month of growth, the government said on Thursday.

June's figure for the EMAE economic activity index, which measures most of the elements of gross domestic product, outpaced the 7.5 percent median forecast given by 15 analysts in a Reuters poll.

The higher-than-expected monthly growth came as analysts watch for signs of the impact of the South American country's acute energy shortages, which have led the center-left government to ration natural gas and electricity supplies during the southern hemisphere winter.

"The effect of the energy shortage on the level of economic activity in June was less marked than expected," Buenos Aires-based consultancy Economia and Regions said in a report, adding that strong consumer spending was responsible for the economy's robust expansion in the first half of the year.

Latin America's No. 3 economy grew 8.4 percent in the first six months of 2007 compared with the same period a year ago, the government also reported.

Argentina is in its fifth year of economic growth greater than 8 percent, after a four-year recession. It expanded 8.5 percent in May and 8.8 percent in June 2006.

The official figure confirmed the number that a government source told Reuters earlier on Thursday.

Argentina July inflation sparks analyst skepticism

Aug 6, 2007 - Argentina's July inflation came in at a lower-than-expected 0.5 percent, the government said on Monday, as official consumer price data again aroused analysts' suspicion of tampering.

A Reuters poll of 14 local and international analysts yielded a 0.7 percent median forecast for July inflation, with estimates ranging from 0.5 percent to 0.8 percent.

Analysts and economists in Argentina and abroad have repeatedly questioned recent inflation data reported by the INDEC statistics agency, saying the government is intentionally underreporting inflation in an election year.

"Nothing surprises us since the INDEC made methodological changes," said Fausto Spotorno, an economist at Orlando Ferreres y Asociados. "We were expecting inflation would be a little higher, at least 0.7 percent."

Inflation has proved to be the biggest economic challenge to President Nestor Kirchner, whose wife, Sen. Cristina Fernandez de Kirchner, is the front-runner in an October presidential election.

"You can see that the index is manipulated, it is not real," said Rodolfo Rossi, an economic analyst and former central bank president. "Surely it must have some basis, but this is not the index that people are suffering."

The consumer price index rose 0.4 percent in June and 0.6 percent in July 2006.

Prices for education rose 2.2 percent in July, INDEC said, followed by a 1.1 percent rise in transportation and communication costs, and an identical climb in prices for home furnishings and supplies.

In a report published ahead of the data's official release, Deutsche Bank said: "Despite the fact every indicator points to high inflation, the official CPI reading keeps surprising on the downside."

The CPI rose 4.4 percent in the first seven months of the year and 12-month inflation through July was 8.6 percent.