Cuckoo Land – Argentine Finance minister tells Congress world crisis will not affect Argentina

Finance minister Hernan Lorenzino said on Thursday that the international crisis will not affect Argentina and attributed this to the policy of drastically cutting the country’s sovereign debt which now stands at only 40% of GDP.

Lorenzino optimism has gone beyond recent statements from his master

“The policy of getting out of debt implemented by the government of President Cristina Fernandez has been crucial. With debt at 40% of GDP, it means we’ve got rid of the heavy burden from the international credit organizations (IMF)”, said Lorenzino during the presentation before Congress of the 2013 budget bill.

He also questioned the unfavourable rating referred on Argentina recently made public by an international risk rating agency which “is an analysis based exclusively on non objective variables”.

The budget bill for 2013 estimates the Argentine economy will expand 4.4% with inflation at 10.8%, a trade surplus of 13 billion dollars and a tax revenue increase of 22% with the US dollar trading at an average 5.10 Pesos.

Investment is forecasted to increase 7.4% and the government finances should end the twelve months of next year with a financial surplus of 587.5 million Pesos and a primary surplus of 55.9 billion Pesos.

 The administration of President Cristina Fernandez is also expected to keep appealing to Central bank reserves to meet debt commitments and financing from government institutions with surpluses.

The head of the government coalition in the Lower House of Congress, Agustín Rossi, said he expects the budget bill to be approved and sent for consideration in the Senate by the end of October.

Numbers aside, the Buenos Aires media points out the fact that Lorenzino’s optimism about the Argentine economy and its alleged immunity from the global crisis does not necessarily coincide with recent statements from President Cristina Fernandez.

Just two and a half months ago the president said that “in a world so closely inter-connected there are no possibilities of not receiving the backlash of the international crisis”.

The Argentine president made the statement in Tucuman, 9 July, Independence Day when she made a call for national unity in the context of the international crisis.

In another political rally Cristina Fernandez said that “we are not invulnerable or untouchable”, but also pointed out that in other circumstances, “a similar situation would have swept away with the country”.

Addressing the Argentine Chamber of Commerce she said that “as we look with concern what is going on in the world, we must not feel euphoric or say that we are invulnerable or untouchable, but yes that in other times, a crisis of this magnitude would have literally swept away with Argentina”.