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UPDATE 1-Argentina annual primary budget deficit first since 1996
March 6, 2013 / 12:25 AM / 5 years ago

UPDATE 1-Argentina annual primary budget deficit first since 1996

BUENOS AIRES, March 5 (Reuters) - Argentina posted a primary budget deficit of 4.37 billion pesos ($888 million) in 2012 , marking the first such deficit since 1996, government data showed on Tuesday.

The center-left government of President Cristina Fernandez said the deficit reflected counter-cyclical spending to fend off the impact of global economic sluggishness.

The primary budget balance, which shows government finances before debts are paid, showed a surplus of 4.92 billion pesos in 2011. The government had forecast a primary budget surplus of 11.54 billion pesos in 2012, according to estimates included in the 2013 budget.

“In light of the deterioration in the international situation, fiscal policy had a counter-cyclical objective in 2012,” the economy ministry said in a press statement.

A long boom in Latin America’s No. 3 economy hit a wall in 2012 due to weak global demand, high inflation, a drought-hit grains harvest, and the impact of government import and currency controls on investment.

Fernandez’s administration has used high state spending to sustain domestic demand and economic growth in Argentina, but analysts say that strategy is losing steam.

The overall fiscal deficit in 2012 totaled 55.56 billion pesos, compared with a deficit of 30.66 billion pesos in 2011.

In December alone, Argentina posted a primary budget deficit of 11.05 billion pesos, widening 36 percent from the 8.11 billion peso deficit recorded in December 2011.

The overall fiscal deficit in December was 33.15 billion pesos.

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