BUENOS AIRES — Argentina’s draft budget, expected to be unveiled this week, would include plans for economic growth of between 3% and 4% in 2022, a government source told Reuters on Tuesday, slightly lower than targets the government previously flagged.
The draft, which must be approved by the country’s Congress, pegs inflation next year at between 30% and 40%, with a primary fiscal deficit between 3% and 3.5%, the source added, asking not to be named as the draft was not public and was still being worked on.
“They are working for it to enter parliament tomorrow,” the source said. Some local media reported that the presentation of the budget to Congress could be delayed.
The draft budget comes after the government suffered a major blow in congressional primary elections on Sunday, losing ground to the conservative opposition after a rise in poverty during the COVID-19 pandemic.
The Economy Ministry did not comment. Until the draft budget is formally presented, amendments could still be made, with the government weighing its policy response to its primary election defeat ahead of midterms in November.
Argentina’s economy is forecast to grow 7% to 8% this year after a 10% contraction in 2020, while inflation is likely to exceed 40%. The country is a major exporter of soy, wheat, corn and beef, its main sources of much -needed foreign currency.
The government is in talks with the International Monetary Fund to renegotiate some $45 billion in payments the country cannot make. Its economic plan will be a key element of those discussions.
President Alberto Fernandez said last month the economy would likely grow about 4.5% in 2022, although a central bank poll of analysts estimated growth of 2.5% next year. (Reporting by Jorge Iorio; Writing by Nicolas Misculin; Editing by Adam Jourdan, Jonathan Oatis and Peter Cooney)