(Adds context, analyst quotes)
By Hugh Bronstein and Alejandro Lifschitz
BUENOS AIRES, March 27 Argentina said on
Thursday its gross domestic product expanded 3.0 percent last
year, below the 3.22 percent level that would have triggered
about $3.5 billion in payments to holders of GDP bond warrants.
Warrants trading in the secondary debt market fell up to
13.7 percent after the government announced the figure.
Economy Minister Axel Kicillof said the 2013 growth data
was calculated using 2004 as the base year, rather than 1993.
"Three percent growth is still very good considering the
international context, which was complicated," Kicillof said.
If the government had used 1993 as the base, growth would
have come in at 5.1 percent, triggering costly payments to
"The decision to make such a large revision to the GDP data
confirms concerns about manipulation of the country's
macroeconomic data," said Walter Molano, emerging markets
analyst at U.S.-based BCP Securities.
But Siobhan Morden, New York-based head of Latin American
strategy at Jefferies LLC, said the 3 percent growth figure is
closer to the estimates of private economists than what it would
have been under the previous base year.
"The pros versus cons argued in favor of downward revision
of GDP growth to align with private sector estimates of 2.9 to
3.0 percent," Morden said.
Argentina issued GDP warrants, payable if growth in Latin
America's No. 3 economy exceeds pre-set yearly levels, as part
of debt restructurings that were negotiated in 2005 and 2010.
The bond revampings followed the country's 2002 sovereign
default, which triggered an economic meltdown that pushed
millions of middle-class Argentines into poverty.
More recently the country had been censured by the
International Monetary Fund for publishing inaccurate economic
In January the Argentine government unveiled a new consumer
price index. So far it has clocked inflation at a rate much
closer to the estimates of private economists, who see prices
soaring more than 30 percent higher per year.
Argentina's finances are still feeling the strain of having
been cut off from the international capital markets since 2002.
Loose fiscal policy has fueled one of the world's highest
inflation rates while heavy-handed currency controls damage
business confidence by cutting off access to U.S. dollars.
Moody's Investors Service earlier this month cut Argentina's
government bond rating further into junk, saying a sharp drop in
the central bank's dollar reserves has raised concerns about the
country's ability to service its remaining foreign debt.
Reserves are down 33 percent over the past year to $27.1
(Editing by G Crosse)