Argentina Government Posts Budget Deficit

Argentina reported a monthly budget deficit (excluding interest payments) in December for the first time in three years following an increase in social security spending and subsidized loans to small businesses. The primary budget deficit was 1.2billion pesos ($380 million) in December, down from a surplus of 1.9 billion pesos in November, the economy ministry said today in a statement in Buenos Aires. Argentina reported a surplus of 25.7 billion pesos for 2007, about 3.2 percent of gross domestic product.

Argentine President Cristina Fernandez de Kirchner has consistently argued that maintaining a budget surplus and a cheap peso has helped Argentina recover from a financial crisis in late 2001, when South America's second-largest economy defaulted on about $95 billion of bonds.