Dec. 21 (Bloomberg) -- Argentine Economy Minister Amado Boudou said he intends to run for mayor of Buenos Aires and said the current city government has been a “failure.”
“The city’s mayor didn’t know how to manage the economic growth the country has had,” Boudou told union leaders, politicians and government officials at a rally in the capital to announce his interest in running in next year’s election. “Today’s there’s a true failure of management.”
Boudou, when asked by reporters whether he will resign in order to run, said that “the electoral timetable hasn’t even been set, so we need to wait and see.”
The city government has yet to set a date for the elections next year. Current Mayor Mauricio Macri, who belongs to the opposition PRO party, hasn’t said whether he intends to seek re-election as head of the capital’s government.
Boudou, 48, who took office in July 2009, led the restructuring last June of $12.2 billion of bonds left over from the country’s 2001 debt default. Earlier this month, he traveled to France to start negotiations to restructure about $6.7 billion in defaulted debt owed to the Paris Club group of creditors.
“All these issues have helped to rehabilitate Argentina in the financial world,” said Walter Molano, head of research at Greenwich, Connecticut-based BCP Securities, in a telephone interview. “His performance was much better than initially expected when he was appointed, because he wasn’t a big name.”
The yield on Argentina’s benchmark 7 percent bonds due in 2015 fell 18 basis points, or 0.18 percentage point, to 8.86 percent, according to Bloomberg market average pricing. The extra yield investors demand to hold Argentine dollar bonds instead of U.S. Treasuries narrowed 15 basis points, or 0.15 percentage point, to 500 at 1:01 p.m. New York time, according to JPMorgan Chase & Co.’s EMBI+ index.
Orlando Ferreres, a former economy vice minister, said that Boudou’s candidacy may add to market concerns and delay an accord with the Paris Club.
“He’ll have to dedicate much more time to the campaign and less to his work as minister,” Ferreres said in a telephone interview. “Everything related to finance, to the management of bonds and the Paris Club negotiations, has to be managed by him.”
The government, which has refused to let the International Monetary Fund review its finances since 2006, last month asked the Washington-based lender to help design a national consumer price index after four years of doubts about the accuracy of its reports.
If Boudou steps down, the next economy minister will have to gain access to international credit markets, complete changes at the national statistics institute, reach an accord with the Paris Club as well as restore normal relations with the IMF, Molano said.
“Boudou is the best candidate we have,” said union leader Hugo Moyano, who heads the ruling Peronist party in Buenos Aires province, the country’s biggest electoral district.
Argentina’s economy grew 8.6 percent in the third quarter from a year ago, down from the 11.8 percent rate in the second quarter.
Buenos Aires-based Ecolatina research company estimates consumer prices rose 27 percent in November from a year earlier, more than double the 11 percent reported by the national statistics institute.
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