* Economy grew 3.0 percent in 2nd quarter vs 1st quarter
* Maintains first quarter’s growth rate
* Year-on-year expansion of 11.8 pct fastest since 1994 (Recasts, adds details, analyst quotes)
BUENOS AIRES, Sept 17 (Reuters) - Argentina posted the highest rate of year-on-year economic growth in more than 15 years on Friday, with the quarterly comparison also reflecting a sustained rebound in Latin America’s No. 3 economy.
Argentina’s national statistics institute, or INDEC, said the country’s gross domestic product (GDP) ARGDP=ECI expanded 3.0 percent between March and June from the previous quarter — the same rate of growth recorded in the first three months of the year.
The economy grew 2.3 percent in the final quarter of 2009 from the previous quarter as Argentina started to recover strongly from the depths of the global economic slowdown.
Argentina’s crucial farming sector is fueling economic activity, especially since farmers gathered a bumper corn and soybean harvest in the last crop season following the previous year’s sharp drought.
GDP grew 11.8 percent in the second quarter year-on-year, INDEC said, driven by growth in the farming sector.
Such rates of expansion are boosting government tax revenue, allowing President Cristina Fernandez to sustain hefty public spending in a preelection year.
But economic analysts say they are also stoking high inflation, which private forecasts put at an annual rate of at least 20 percent.
“This is a growth cycle that is rather unbalanced as it is generating significant cost-push and demand-pull inflationary pressures and is levered by record high levels of government spending,” Goldman Sachs senior economist Alberto Ramos said in a report.
INDEC data shows that the 11.8 percent jump in the second quarter was the highest year-on-year quarterly increase since at least 1994, a year after the agency incorporated a new statistics system.
Some analysts think official data is overly rosy when it comes to economic activity.
“Official statistics overestimate growth ... for us real growth is around 9 percent, which is still an excellent number, said former Finance Secretary Miguel Kiguel.
The country’s economy is growing on the back of robust demand for Argentine goods from neighboring powerhouse Brazil, the bumper grains harvests and strong consumer spending.
That has raised the appeal of Argentina’s GDP warrants.
An official at the Economy Ministry told Reuters on Thursday the government will have to pay $2.2 billion in GDP warrants alone in 2011 since red-hot growth in 2010 will boost the payout on those GDP-linked debt instruments.
The Argentine government released its 2011 budget bill on Thursday in which it forecasts economic growth at 8.9 percent this year and 4.3 percent in 2011. [ID:nN16252575] (Reporting by Luis Andres Henao; Additional reporting by Magdalena Morales; Writing by Eduardo Garcia; Editing by Diane Craft)