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August 30, 2014
Thursday, March 27, 2014

INDEC reveals 2013 growth at 3%, GDP bond will not be paid

The National Institute of Statistics and Census (INDEC) has revealed that the Argentine Gross Domestic Product grew by 3 percent across the last calendar year, dropping short of the figure necessary to service bonds linked to the nation's economic activity.

The value of the titles have dropped up to 13 percent in value, while the government today hinted that the growth rate would be recalculated in September of the current year.

Economy Minister Axel Kicillof said the 2013 growth data was calculated using 2004 as the base year, rather than 1993.

"Three percent growth is still very good considering the international context, which was complicated," Kicillof said.

Over the past weeks, markets speculated that INDEC would release figures showing a GDP growth higher than 3.2 percent, the lowest level necessary for payment under current agreements. Enthusiasm waned during the day, however, as the official announcement approached, and before the data was revealed bonds plummeted by as much as 11 percent.

The change in methodology applied by the current index was one of the conditions imposed by the International Monetary Fund, who had criticised the Argentine government for not adopting measures previously to tackle suspect inflation and growth data.

The IMF nevertheless will have to analyse the changes made in this latest system of calculating growth in an attempt to increase transparency.
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Tags:  Argentina  growth  inflation  GDP  INDEC  





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