Argentina has to spur consumer spending: consulting firm

The Argentine government's main challenge in 2015, an election year, is to spur consumer spending in order to reactivate the economy, according to a consulting firm.

The economic indicators for 2014 were dismal, and the ruling Front for Victory party, if it hopes to win the elections, needs to promote economic growth through spending, said Ecolatina on Friday.

"Last year, inflation accelerated, economic activity fell, the fiscal deficit grew, and social indicators worsened," said the Buenos Aires-based business consulting firm in a report.

In 2015, the government will face more challenges, such as presidential elections, foreign debt repayments, default risks, and an uncertain international economic landscape that may bring lower commodity prices, currency devaluation in emerging economies, and a slowdown in regional growth.

To improve economic performance in the lead-up to elections in October, the government must, in addition to maintaining currency stability, reactivate spending, said the report.

"It is necessary to have enough foreign currency (in circulation) to supply the domestic demand," said the report, reinforcing its assertion the government will have to relax currency controls to revive spending and economic activity.

Argentine President Cristina Fernandez is barred by law from running for a third consecutive term, but members of her Cabinet, as well as a couple of governors, are among the ruling party's potential candidates. Endi