March 22, 2013 / 10:46 PM / 5 years ago

UPDATE 1-Argentina's January primary budget surplus widens 31 pct on year

BUENOS AIRES, March 22 (Reuters) - Argentina posted a primary budget surplus of 815.7 million pesos ($160 million) in January, widening 31 percent from a year earlier, the government said on Friday.

The primary budget balance shows government finances before debts are paid. It is an important indicator of fiscal health in Argentina, which has been virtually shut out of global credit markets since a 2002 default.

Argentina’s overall fiscal deficit totaled 1.58 billion pesos in January, shrinking from 2.82 billion pesos in the same month of 2012, data from the Economy Ministry showed.

Both primary spending and government income rose 24 percent year-on-year in January, to 64.54 billion pesos and 65.36 billion pesos, respectively.

In 2012, Argentina posted its first primary budget deficit since 1996, citing counter-cyclical spending aimed at fending off the impact of global economic sluggishness.

A long boom in Latin America’s No. 3 economy hit a wall in 2012 because of 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.

In January 2012, the primary budget surplus totaled 622.4 million pesos.

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