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Argentina's Economy Is `Vigorous,' Fernandez Says
Bloomberg
August 20, 2008

By Bill Faries

Argentine Economy Minister Carlos Fernandez told exporters the country's economy is ``more vigorous than ever,'' one week after the government began buying back its own bonds to shore up waning investor confidence.

``All sectors of the economy are growing,'' Fernandez said in a speech to the Argentine Exporters Chamber in Buenos Aires. ``This is the result of our commitment to a competitive exchange rate, fiscal and trade surpluses and the accumulation of international reserves.''

Doubts about Argentina's inflation data and slowing economic growth have eroded confidence in South America's second-largest economy. Argentina bought back $270 million in bonds last week, after the debt fell for seven straight days. Standard & Poor's lowered Argentina's foreign debt rating to B, five levels below investment grade, on Aug. 11.

Argentina reported a budget surplus excluding interest payments of 4 billion pesos ($1.32 billion) in July and a trade surplus of $1 billion, President Cristina Fernandez de Kirchner said yesterday. Economy Minister Fernandez said exports this year will reach $72 billion. The economy grew 6.5 percent in June from a year earlier.

``The data is convincing,'' Fernandez said. ``We're working to keep it that way.''

Fernandez's government is facing pressure from opposition leaders and members of her own party to improve the accuracy of the country's economic statistics. Vice President Julio Cobos said Aug. 14 that the country needs a ``clear, transparent'' consumer price index, the newspaper Clarin said.

Economists and political leaders have questioned Argentina's inflation data since January 2007, when Fernandez's husband and predecessor, Nestor Kirchner replaced personnel at the statistics institute in order to ``improve operations.''

Argentine consumer prices rose 9.1 percent in July from a year earlier, the statistics agency reported Aug. 11.

The cost of insuring Argentine debt through five-year credit-default swaps increased 12 basis points to 8.15 percent at 3:20 p.m. New York time. That means it costs $815,000 to protect $10 million of the country's debt from default.