Argentina’s economy grew more than expected in the third quarter, boosting the chances that holders of securities linked to the country’s growth will be paid as much as $3 billion next year.
Gross domestic product expanded 5.5 percent from a year earlier, according to a report released today by the national statistics institute, compared with a 4.9 percent median estimate of nine economists in a Bloomberg survey.
President Cristina Fernandez de Kirchner is fueling growth after boosting spending by 36 percent this year and increasing subsidies to boost consumer spending. Argentina’s economy needs to grow more than 3.22 percent to trigger an annual payment to holders of the country’s GDP warrants. GDP expanded 5.7 percent through September.
The warrants rose 0.6 percent to 8.50 cents at 4:13 p.m. in Buenos Aires, according to data compiled by Bloomberg. Payment for GDP warrants based on this year’s growth will be made in December 2014, according to the bond prospectus.
Argentina posted a current account deficit of $1.27 billion in the third quarter, the statistics institute, known as Indec, said. The deficit helped push central bank reserves down 29 percent this year to $30.6 billion as the country increases fuel imports.
The International Monetary Fund in February censured Argentina for failing to report accurate data on inflation and GDP, prompting the government to announce a new consumer price index to be unveiled in February and growth figures in March.
The peso, whose rate is managed by the central bank, has weakened 23 percent against the dollar this year.
Argentina, the world’s biggest exporter of soybean derivatives, produced 49.3 million tons during the 2012-2013 soybean season, the second largest ever harvest, according to preliminary estimates by the Agriculture Ministry.