Emphasis in the continued increase in the argentine economy

Infobae - January 24th 2007

The CEPAL points out that the expansion will be of 8.5% in 2006, the fourth year of "intense"growth. The paper projects a 7.5% improvement for next year and pointed out the behaviour of different variables.

The argentine economy will grow 8.5% in 2006, its fourth year of "intense" growth informs in Santiago the "Comision Economica para America Latina y el Caribe" (CEPAL).

In its preliminary report about the regions economies, the Cepal also points out that inflation has decreased to 10% (12.3% in 2005), while real salaries have increased 9.4% in comparison to last year and urban unemployment has descended from 11.6% to 10.4%.

Exportations have increased from 44.343 million dollars en 2005 to 54.274 million this year, while importations have gone form 34.916 to 41.161 million dollars. The argentine economy has grown 9.0% in 2004 and 9.2% last year.

The CEPAL pointed out that in that country the macroeconomic frame continues to be "considerably expansive" and within that frame projected an increase of around 7.5% for next year.

"Once the recovery process from the acute crisis suffered at the beginning of the decade has been overcome, there is the possibility of a transition towards a sostained growth period", the report underlines.

In the near future, the previous seems to assume a strengthening of savings trends, investment and exportations, as well as the establishment of appropiate distribution patterns, from a social viewpoint, it adds.

According to the document, in the short term important issues such as correspondence between demand increase and increased offer and the maintenance of external and fiscal surplus appear, which had contributed in great measure to widen the margins of economic managment.

This year, fiscal policy has evolved in Argentina without great pressures, due to the sostained increase of tax collection, so that inspite a noticeable increase in the spendig of the government, the surplus in the public area will exceed 3% of Gross Domestic Product (GDP).

The social indicators of poverty have also continued to improve, sostained by the increase in employment, which was greater then the expansion of job offers and real remuneration.

CEPAL reminded that at the beginning of this year inflation had produced public concern, due to which the authorities turned to following and interventoin in the fixation of prices in sensible sectors.

In the context of a positive financial balance, the government has initiated formal nogotiations to cancel the debt with the Paris Club which ascends to 6.300 million dollars, after having cancelled the total of its debts with the IMF at the beginning of the year.

The reports also emphasizes that the volume of private consumption continued to grow in a dynamic way and accelerated the expansion of public consumption, despite the latter stayed bellow the expansion of the GDP.

National savings "comfortably covered" the investment funds necessities, and the dynamics in public works and private investments, stimulated by a sostained demand, was reflected in the price of properties and in a vigorous growth of spending in construction, the report also states.