Dec. 4 (Bloomberg) -- Argentine President Cristina Fernandez de Kirchner unveiled a 13.2 billion-peso ($3.9 billion) plan to spur the country’s consumption and exports in a bid to counter the effects of the global financial crisis.

Fernandez said the government will fund reduced-interest loans for consumers and companies, as well as make export financing cheaper. She also announced a five percentage-point cut in export taxes on wheat and corn, and said further reductions are possible.

“This crisis obliges all of us -- public officials, business leaders and workers -- to undertake pro-active, anti- cyclical policies to confront a drama that, this time, we didn’t create,” Fernandez said at the presidential residence in Buenos Aires.

The announcement comes as Argentina’s economy shows signs that it’s reaching the end of almost six years of 8.5 percent annual growth. Tax revenue grew 18 percent in November from a year earlier, the slowest pace since April 2006. Auto production, which helped Argentina recover from a 2001 financial crisis, fell 28 percent last month from a year ago.

Shrinking Economy

Argentina’s economy will shrink 1 percent in the fourth quarter this year and will grow 0.3 percent in 2009, UBS Pactual economist Javier Kulesz said in a report today.

“We are facing a very strong deceleration,” said Fausto Spotorno, an economist at Ferreres & Associados, a research company in Buenos Aires. “This plan is positive in terms of helping generate some liquidity, but a recession is coming.”

Fernandez’s proposal includes 3.5 billion pesos to provide loans for purchases of goods such as washing machines and refrigerators. The government will offer 3.1 billion pesos to help the auto industry by offering financing to people who have never bought a new car before. Companies that take part in the plan will have to maintain personnel levels, Fernandez said.

“This shows a government actively trying to confront the global crisis,” ruling party lawmaker Agustin Rossi told reporters after the speech.

Banks, including the state-owned Banco de Inversion y Comercio Exterior SA, will offer loans at fixed rates of 11 percent for one year to help finance exports and investments, Fernandez said. The move will help give companies “more certainty” over their access to financing, she said.

Fernandez said taxes on wheat and corn exports will decline to 23 percent and 20 percent, respectively. The government will cut the tax one additional percentage point each time production exceeds certain fixed limits by one million tons. The reduction in export taxes for wheat and corn isn’t included in the cost of the 13.2 billion peso plan, Fernandez said.

“Cutting export taxes by 5 percentage points on wheat and corn is almost meaningless,” Hugo Biolcati, president of the Rural Society, the country’s biggest farm group and an advocate of eliminating export taxes, said in an interview. “Credit to fund an activity that isn’t profitable is a lead-filled lifejacket.”

To contact the reporter on this story: Bill Faries in Buenos Aires wfaries@bloomberg.net

Last Updated: December 4, 2008 14:20 EST