- Growth was in line with median estimate in Bloomberg survey
- Government is stepping up spending ahead of October elections
Argentina’s economy expanded in line with forecasts in the second quarter as the government ramped up spending to encourage private consumption ahead of October’s presidential elections.
Gross domestic product in South America’s second-largest economy grew by 2.3 percent, the national statistics agency said Friday. The median estimate of six economists in a Bloomberg survey was for an expansion of 2.3 percent.
President Cristina Fernandez de Kirchner’s government is stepping up spending ahead of the Oct. 25 vote as her alliance’s candidate leads polls to succeed her. Spending rose 46 percent to 190 billion pesos ($20 billion) in June, and the fiscal deficit is expected to widen to 7.3 percent of gross domestic product.
Even after Argentina overhauled its statistics reporting over the past 18 months at the request of the International Monetary Fund, economists remain concerned that official growth figures are inflated. The IMF said June 3 that Argentina is not yet in full compliance on its data reporting and extended the deadline by a year to resolve its inflation and GDP indexes.
The government said in its 2016 budget, presented to Congress on Sept. 15, that it expects the economy to grow 2.3 percent this year. The median estimate from 23 analysts surveyed by Bloomberg is for the economy to grow 0.5 percent this year.