Argentina expands stimulus scheme

Argentina unveiled plans on Monday to invest 111bn pesos in an expanded public works “megaplan” to kick-start the economy, lift public investment to a record 5 per cent of gross domestic product and double jobs in the construction sector.

The package went beyond an initial announcement of a 71bn peso ($20bn, €15bn, £13.5bn) plan by Cristina Fernández, the president, late last month, which she said at that time was the most ambitious in living memory, and is intended to stimulate an economy showing signs of flagging after six years of rapid growth.

“In the light of changing events, we have to reformulate our plans,” the president told officials, business and union leaders. “We have remodelled, redesigned and increased the level of investment.”

José Francisco López, public works secretary, said 71bn pesos of the plan, focusing on infrastructure and energy projects, was already covered by “structured finance” and the government was “working to get” funding for the 40bn pesos outstanding.

No further financing details were available but Aldo Abram, an economist, said he would study the plan “to see where the money is coming from and its impact on public sector solvency”.

Ms Fernández has made a welter of announcements lately, including plans to offer cheap loans to consumers to revive sales in the struggling car sector, the country’s top manufacturing industry. But she has yet to spell out where the money will come from.

Mr López pledged 57bn pesos on public works in 2009 alone, “more than double the amount invested this year” and Ms Fernández said: “We are reaching the record level of investment of 5 per cent of GDP.”

As a Christmas present to about three-quarters of pensioners, Ms Fernández also unveiled a 200 peso bonus but stressed it was a one-off.