BUENOS AIRES: Argentina will post a primary fiscal deficit, which excludes interest payments, of 56 billion pesos ($6.55 billion), or 1.35 percent of GDP in 2014, the country's cabinet chief Jorge Capitanich said on Friday.
The leftist government of President Cristina Fernandez has used high state spending in an attempt to sustain domestic demand in the stagnating economy and to finance costly energy and transport subsidies as well as social welfare programs.
"The primary fiscal result projected for 2014 is -1.35 percent of gross domestic product," Capitanich told reporters.
The result does not include debt interest payments.
The primary budget is closely followed by financial markets as it represents a country's capability of honouring its financial commitments.
Latin America's No. 3 economy ran a primary budget deficit of 22.5 billion pesos in 2013.
The government forecasts an inflation rate of 24 percent this year, though some economists say inflation will be closer to 40 percent. Capitanich said the overall fiscal deficit would be 137 billion pesos, equivalent to 3.3 percent of GDP.
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