Argentine first lady may seek to only tweak economy

By Hilary Burke - Analysis

BUENOS AIRES (Reuters) - Argentina's first lady easily won the presidency on Sunday in an election that offered few surprises, but how she will handle the country's thorniest economic dilemmas is less predictable.

Sen. Cristina Fernandez de Kirchner triumphed with nearly 45 percent of the vote. Her popularity was closely tied to that of her husband, President Nestor Kirchner, who oversaw nearly 50 percent economic growth during his four-year term.

In the final days of the campaign, Fernandez stressed her role as Kirchner's top advisor, taking joint credit for the country's rebound from a 2001-02 financial and social crisis.

But despite consumer boycotts of expensive tomatoes and potatoes, Fernandez has not specified how she will fight inflation, which is among Argentines' biggest worries.

It is also unclear how she will manage some other downsides of her husband's legacy: energy shortages, a shrinking budget surplus and depressed public utility rates.

"All changes and all policies should be gradual," Fernandez, a 54-year-old lawyer and center-left senator, told local TV last week.

"I don't believe in shock policies any more," she said, referring to free-market measures backed by the International Monetary Fund and widely discredited in Argentina.

Economy Minister Miguel Peirano, whom many expect to continue after Fernandez takes office on December 10, told local radio that the first lady will continue Kirchner's policies.

"Argentina must meet the challenges of achieving full employment, improving the distribution of wealth and fueling further economic growth," Peirano said on Sunday.

NAGGING CONCERNS

Argentines expect 20 percent inflation in the next year, double the official rate. And consumer confidence has shed 21 percent after hitting an all-time high in January, according to a survey done this month by Torcuato Di Tella University.

Although Fernandez is a new face, her government will be largely perceived as a continuation of Kirchner's, giving her less margin to address these nagging concerns.

She fiercely rejects the pro-market policies of the 1990s, which many blame for the 2001 crisis, and she backs a weak peso to help "re-industrialize" Argentina and boost exports.

The president-elect also bristles at monetary recipes for controlling inflation by cooling the economy, saying more investment is the key to taming prices while fueling growth.

She has called for a broad "social pact" between the government, big business and unions on how to sustain growth, and share its benefits, in the longer term.