Argentina Plans Infrastructure Boost

Argentina’s secretary of public works, Jose Francisco Lopez, says that the government will invest up to ARP57bn in 2009 in infrastructure as a countercyclical measure to jumpstart the economy. The total investment will be ARP111bn according to Lopez, who does not specify the timeframe. Financing has been secured for about ARP71bn of the total, he adds. Of the ARP57bn to be invested in 2009, almost ARP33bn will come from the government’s budget for 2009, ARP2.5bn will come from new loans from multilaterals, ARP6bn from private financing, ARP12bn from BNDES, Banco Nacion and social security administrator Anses, and ARP3.5bn will come from savings generated by the elimination of certain subsidies, Lopez says. The announcement was made during a televised conference yesterday. Barclays Capital believes that the use of additional Banco Nacion and Anses sources could potentially hurt the sovereign credit because these are being used to cover existing financing needs. “However, we think that, by and large, most of the spending to be announced is already included in current 2009 plans and thus entails no additional fiscal strains,” the shop adds.