Argentina forecasts 3.5 pct growth for 2017

Argentina's economy is projected to grow 3.5 percent in 2017, the country's economy minister said Thursday.

In presenting next year's proposed budget to the Chamber of Deputies, Economy and Public Finance Minister Alfonso Prat-Gay also forecast an annual inflation rate of 17 percent and a fiscal deficit of 4.2 percent of gross domestic product (GDP).

"This is a budget that is based on the truth. It is the most realistic estimate of the macroeconomic variables for the coming year," Prat said.

Argentine President Mauricio Macri, who took office in December 2015, told Radio la Red that "the end of the recession is at hand."

The recession "began six months before we came into office, the result of the accumulated wear and tear of inflation, which is what destroys a community's capacity for growth, because it distorts prices," said Macri.

He said he was confident his government's reforms will put the country back on the "track to growth."

This year, Latin America's third-largest economy is expected to shrink 1.5 percent, according to the International Monetary Fund (IMF).

In a breakdown of the budget, Prat said the biggest share will go to pay for social services and another large chunk will be invested in infrastructure works to activate the economy and create jobs.

"Social security benefits are expected to increase by 25 percent annually in 2017," he said.

State news service Telam noted the proposed budget, the first submitted by Macri's administration, earmarks billions of U.S. dollars to pay off part of Argentina's foreign debt.

Among the priority projects is upgrading the Belgrano cargo railway in northern Argentina, the agency cited Prat as saying.

Others include building 120,000 housing units and a potable water plan.

Prat said the ministry was also preparing to send lawmakers a package of three proposed financial reforms that will strongly impact the budget. Endit