Главная/

Иностранные языки /

Argentina /english/

in 1989 to nearly 24 percent between in 1992. In the same

period, public expenditures fell as a percent of GDP. Capital

spending and non-privatization receipts both declined slightly.

The fiscal surplus also was improved by the drop in dollar

interest rate, which cut accrued interest obligations by 1.3

percent of GDP. However, interest obligations still exceeded the

operational primary surplus slightly in 1992. Inflation

continues to decelerate. The annualized inflation rate in the

last quarter of 1992 was about 9 percent, compared to over 20

percent a year earlier. Nonetheless, inflation still exceeds

international rates, which is necessary to sustain the fixed

exchange rate regime . During 1992 capital inflows, jointly with

the economic expansion, contributed to an 84 percent increase in

imports; exports rose by 1 percent. As a result, the current

account deficit for 1992 reached 5.2 percent of GDP, up from 2

percent a year ago. Capital inflows of $12.0 billion, mostly

private, more than offset the current account deficit, allowing

a $3.4 billion accumulation of reserves. After signs of slowdown

in economic activity during January and February 1993,

industrial production recovered in March and April, with the

first quarter of 1993 marking the eleventh consecutive month of

economic expansion. Capital inflows recovered in the first

quarter of 1993, further strengthening the level of

international reserves. The monthly inflation rate between

January and March 1993 averaged 0.7 percent, about the same as

the last quarter of 1992.

Medium-Term Prospects

The government projects real growth averaging 6.5 percent over

1992-95. Over this period its fiscal program for aims at

generating a primary surplus sufficient to finance interest

obligations, thus eliminating the need for the inflation tax.

This involves efforts to raise the primary balance from about

$3.3 billion in 1991 to about $4. 1 billion in 1995. The success

of this program will largely depend on medium-term reforms to

improve the structural underpinnings of public finance, such as

social security legislation, labor reforms, and the evolution of

the fiscal relationships with the provinces, given the

increasing decentralization of power and responsibilities from

the center to provincial governments . This scenario is

attainable if the government continues to improve its fiscal

position, and if private markets generate a smooth transition to

a sustainable balance of payments and growth path. There are

significant risks to this program. The probability of adverse

events affecting the convertible peso declines, however, as the

government progresses on reforms that improve the fundamentals

of public finance. Past reforms in the public sector anchor

stabilization and are unlikely to be reversed during any

financial turbulence. Also, reserves are the highest in a decade

and cover the monetary base (although not the deposit base),

which would deter a speculative attack on the peso. Even if

problems give rise to pressure to alter the policy framework, in

all likelihood any emerging policy regime would of necessity

focus on maintaining fiscal balance and policies conducive to

private investment. Over the last few years Argentina has

enacted serious and difficult structural reforms with

considerable public support. The lack of alternatives to fiscal

discipline and price stability, and memories of the

hyperinflation of 1989/90, have made stability politically

popular. These facts are powerful ballast that is likely to keep

the ship of structural adjustment headed in the same direction,

even in a financial storm.