Sept. 17 (Bloomberg) -- Argentine President Cristina Fernandez de Kirchner’s budget proposal forecasts that the surplus before interest payments will widen next year as the economy recovers from the global financial crisis.

The 2010 budget bill estimates a primary surplus equivalent to 2.3 percent of gross domestic product, or 28.6 billion pesos ($7.7 billion), while the estimate for this year’s surplus was cut to 1.36 percent of GDP, down from 3.27 percent, according to the budget proposal posted on Congress’s Web site.

South America’s second-biggest economy will expand 0.5 percent this year, the slowest pace since an 11 percent contraction in 2002 that followed the country’s default on $95 billion in debt in late 2001, Economy Minister Amado Boudou told congress today. Looking ahead to 2010, GDP will rise 2.5 percent, as the economy rebounds after the global economic slump, he said.

“Argentina received aftershocks from the crisis,” Boudou told lawmakers today at Congress. “It hurt trade, with the tremendous drop in demand for the country’s goods, their prices and also in investment.”

Total revenue will rise 23.8 percent to 297.2 billion pesos while spending will rise 23.7 percent to 296.6 billion pesos, leaving an overall budget surplus of 0.05 percent in 2010, according to the bill.

The peso will trade at an average of 3.95 pesos per dollar next year, while consumer prices will increase 6.6 percent in 2010, the budget proposal said.

To contact the reporter on this story: Eliana Raszewski in Buenos Aires at eraszewski@bloomberg.net; Drew Benson in Buenos Aires at abenson9@bloomberg.net

Last Updated: September 17, 2009 17:32 EDT