Macroeconomic Forecast Argentina

October 2006 | Macroeconomic Forecasts

The primary budget surplus (the fiscal balance before debt servicing costs) amounted to ARS2.21bn in August, rising by 19.9% y-o-y. The accumulated primary budget surplus for the first eight months of 2006 widened to ARS16.9bn and increased by 10.6% y-o-y during the same time period. The healthy budget is largely a result of strong economic growth during H106 and double-digit headline consumer price inflation (CPI), which significantly boosted government tax revenues. We expect real GDP growth to slow to 4.5% in 2007, which is likely to negatively affect next year's tax revenue growth. Moreover, President Nestor Kirchner's large fiscal spending

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