January 19, 2018 / 9:17 PM / a year ago

UPDATE 1-Argentina grew 2.9 pct in 2017, avoids GDP warrant payment -source

(Adds fourth quarter figure, background on GDP warrants and Argentina economy)

BUENOS AIRES, Jan 19 (Reuters) - Argentina’s gross domestic product (GDP) expanded by 2.9 percent in 2017, and grew 0.7 percent in the fourth quarter from the third quarter, a Treasury Ministry source said on Friday, bouncing back from a 2.2 percent contraction the prior year.

The annual growth figure means Argentina will not have to make a coupon payment on growth-linked bonds known as GDP warrants this year, the source said. Growth of more than 3 percent would have triggered a payment.

Payments on the warrants, issued as part of debt exchanges in 2005 and 2010 following Argentina’s 2001 default, could have totaled as much as $3 billion. Latin America’s No. 3 economy could still make payments in future years if growth exceeds 3 percent.

The government’s 2018 budget estimates growth of 3.5 percent this year.

The economy grew 4.2 percent in the third quarter compared with the third quarter of 2016 and expanded 2.5 percent in the first nine months of the year, according to the most recent data from Argentina’s Indec government statistics agency.

Indec is expected to publish fourth quarter GDP data on March 21. The official determination of whether the GDP warrant payments will be made depends on revised data Indec will publish later this year. (Reporting by Luc Cohen and Walter Bianchi; Editing by Chizu Nomiyama and Grant McCool)

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