* Latin America's No. 3 economy seen growing 6.2 pct next
* Forecast above threshold for payment on debt
By Guido Nejamkis
BUENOS AIRES, Sept 12 Argentina's economy is
expected to grow 6.2 percent next year, well above the threshold
for payment on the country's growth-linked debt and picking up
from this year's forecast expansion, Economy Minister Hernan
Lorenzino said on Thursday.
Gross domestic product is seen growing 5.1 percent in 2013,
he added, as a massive grains harvest and the automobile
industry continue to boost growth. The forecasts are contained
in the 2014 budget bill, which Lorenzino was presenting to
Latin America's No. 3 economy grew just 1.9 percent in 2012
after expanding 8.9 percent in 2011, according to official data.
This reflected weak global demand for its exports, a poor grains
harvest, high inflation and the negative impact of currency and
trade controls on investment.
President Cristina Fernandez has implemented protectionist
trade policies, currency controls and heavy regulation of the
country's key grains sector, making her popular among many of
the country's poor but frustrating the business sector.
"It's precisely these policies that we've been implementing,
that protect the domestic market and Argentine jobs..., which
have allowed Argentina to grow, amid the most profound global
crisis since the 1930s," Lorenzino told Congress.
Argentina's forecast 2013 growth is set to beat the regional
average. The economies of Latin America and the Caribbean are
seen expanding 3 percent this year, as a gloomier global economy
restrains exports and domestic demand, a United Nations body
said in July.
But some analysts were skeptical about the Argentine data,
which many say is manipulated.
"The economic growth target (for 2014) seems overly
optimistic," said Nicolas Bridger of the Prefinex consultancy.
"We think growth will be around 2 percent."
Creditors were eagerly awaiting the 2014 budget estimates to
see if growth would be strong enough to trigger payouts to
holders of billions of dollars in Argentina's GDP warrants.
Growth of at least 3.03 percent is needed in 2014 for
Argentina to pay holders of its GDP warrants in December 2015.
GDP-linked warrants shot up after the announced forecasts.
The government intends to use around $9.8 billion in central
bank reserves to pay foreign currency-denominated debt, a
government source told Reuters later on Thursday. That would
mark a pick-up from an estimated $9.3 billion this year.
The country's trade surplus is seen at about $10.1 billion
next year, slightly down from this year's forecast $10.6
That doesn't bode well for Argentina, as the trade surplus
is a crucial source of foreign currency for the country, which
has been virtually frozen out of debt markets since a 2002
The budget bill foresees 10.5 percent inflation this year
and 9.9 percent in 2014. Private inflation estimates, however,
hover closer to 25 percent a year.
Argentina foresees a primary budget surplus of 2.59 percent
of gross domestic product next year. The primary surplus
represents government savings before debts are paid.
The exchange rate is seen at 6.33 pesos per U.S. dollar in
2014. On Thursday, the currency was trading at 5.72 per dollar
at the official exchange rate and 9.26 per dollar in the black
Fernandez imposed currency controls to stem capital flight
and safeguard the central bank's foreign reserves.