Argentina Economy to Expand 3 Percent

Argentine Treasury Minister Nicolas Dujovne said on Thursday he was confident the economy would grow more than 3% this year, while another treasury official said the economy had rebounded in March after declining the prior two months.

The country’s center-right government, which is banking on attracting foreign investment and an infrastructure push to revive the economy after a deep recession last year, has long held a forecast for 3.5% growth in 2017, Reuters reported.

Many analysts see that goal as too optimistic. “I am very sure that the Argentine economy will grow more than 3% this year,” Dujovne told an investors’ conference in Buenos Aires. “We are in a recuperation phase, which is going to accelerate.”

Gross domestic product is seen growing 2.7% in 2017, according to a central bank poll of analysts released earlier this month, a tick slower than the 2.8% estimated in the bank’s previous survey.

Argentina’s economy contracted 2.3% in 2016, as a currency devaluation and the elimination of utilities subsidies triggered inflation of around 40%, denting consumption. The economy exited recession with modest growth in the final two quarters of last year, and market-friendly President Mauricio Macri is hoping a recovery can boost his coalition’s chances in October’s midterm elections, giving him room to finish his reform agenda.

Speaking to reporters later on Thursday, Treasury Ministry chief adviser Guido Sandleris said monthly economic data would likely show that the economy expanded 1.7% in March compared with the previous month, after declining 0.4% and 1.9% in January and February, respectively.

He added that the economy would grow 0.8% in the first quarter compared with the fourth quarter of 2016, and that growth would accelerate in the second half as salary increases linked to collective bargaining agreements kicked in, boosting consumption.

“No one disputes that we’ve exited recession and the economy is recovering,” Sandleris said, adding that full-year 2017 growth would likely be around 3%. Government statistics agency Indec is expected to publish March economic activity data on May 23. First-quarter growth data is expected on June 21.