ARGENTINA: President Cristina Fernandez maintains a huge lead in opinion polls days ahead the presidential election, critics warn of challenges ahead, saying the economy is at risk of a hard landing

Record ID: 446656

  • Title: ARGENTINA: President Cristina Fernandez maintains a huge lead in opinion polls days ahead the presidential election, critics warn of challenges ahead, saying the economy is at risk of a hard landing
  • Date: 20th October 2011
  • Summary: BUENOS AIRES, ARGENTINA (RECENT) (REUTERS) VARIOUS OF PEOPLE BUYING CLOTHES AT A SALE VARIOUS OF STORE FRONT ADVERTISING SALES BUENOS AIRES PROVINCE, ARGENTINA (RECENT) (REUTERS) VARIOUS OF PEOPLE AT FRUIT AND VEGETABLE MARKET BUENOS AIRES, ARGENTINA (RECENT) (REUTERS) VARIOUS OF MONEY EXCHANGES IN THE CITY POLICE OFFICER DIRECTING TRAFFIC VARIOUS ECONOMIC ANALYST FAUSTO SPOTORNO, WORKING WITH A COMPUTER (SOUNDBITE) (Spanish) ECONOMIC ANALYST FABIO SPOTORNO, SAYING: "Up until now the government - thanks to the resources it has gotten from soy and of the increase in economic activity - has not needed to prioritize public expenditures. Basically they have [spent on everything]. I think they are reaching the end of these days. You can't spend on everything at the same time. You are going to have to make priorities. Slowly soy continues to rise to the rate that it has been in order to maintain this financing through retention [taxes]. If they keep financing through the central bank it could generate scary inflation." A CITY BUS IN TRAFFIC SUBWAY STATION ANTENNAS ON TOP OF TELEPHONE COMPANY BUILDING
  • Embargoed: 4th November 2011 12:00
  • Keywords:
  • Location: Argentina, Argentina
  • Country: Argentina
  • Topics: Economy,Politics,People
  • Reuters ID: LVAD2XGRYRHNG68H5F4GAREBLWVA
  • Story Text: Argentine President Cristina Fernandez holds a massive lead over opponents in Sunday's (October 23) presidential election and is poised to cruise into a second four-year term lifted by vigorous economic growth at more than nine percent coupled with her generous social spending programs.
    Despite her achievements however, experts warn that she will face significant challenges - largely economic - in a second term.
    The 58-year-old is enjoying approval ratings of more than 60 percent thanks to the brisk economy, the opposition's failure to mount a convincing challenge and public sympathy following the death a year ago of her husband and predecessor as president, Nestor Kirchner.
    Latin America's third-largest economy is growing at one of the world's fastest rates fuelled by government-stimulated consumer demand, booming grain exports and strong industrial output, led by car sales to its top trade partner, Brazil.
    High global commodities prices are also helping fan growth in the world's top exporter of soyoil and soymeal.
    Fernandez has rebounded from low approval ratings and angry protests by farmers and middle-class voters that erupted early in her first term.
    Polls show she could win more than 50 percent of the vote on Sunday and political analyst Roberto Bacman said voters would give Fernandez a vote of confidence.
    "Today the thing that worries Argentines more than anything is that all of this continues. That this state - I call it a state of well-being - that the climate of the era we're living today continues. A government that controls the variables of the economy; there is no [economic] crisis, and you can't see a devastating collapse on the horizon. We are relaxed, we have work. [But yes] we are worried for other things, that we hope get better," Bacman told Reuters.
    But despite her administration's achievements and high approval rating, challenges remain.
    Inflation is a real threat while the cooling of the Brazilian and developed economies could drag on its growth.
    Robust growth has allowed high public spending rates - but that could change in a second term.
    "Up until now the government - thanks to the resources it has gotten from soy and of the increase in economic activity - has not needed to prioritize public expenditures. Basically they have [spent on everything]. I think they are reaching the end of these days. You can't spend on everything at the same time. You are going to have to make priorities. Slowly soy continues to rise to the rate that it has been in order to maintain this financing through retention [taxes]. If they keep financing through the central bank it could generate scary inflation," economist Fausto Spotorno, said.
    Fernandez says she would dedicate a second term to continuing her late husband's policies, but any slowdown in tax revenue could force her to cut multibillion dollar subsidies on everything from bus tickets to gas, water, electricity and phone bills.
    But highly popular social initiatives are likely to continue with Fernandez already committed to broadening child benefits.
    "I want to extend the universal child benefit to pregnant women starting at the third month of pregnancy," Fernandez said.
    Following in Kirchner's footsteps she has also championed human rights as dictatorship-era cases continue to work their way through the courts.
    Under Fernandez, Argentina became the first Latin American country to grant same sex couples full marriage and adoption rights.
    On the world stage Fernandez has urged richer nations to reform monetary policy following the euro zone crisis, while criticising the UN for failing to respond to Argentine demands for sovereignty over the Falkland Islands, which Argentina calls the Malvinas.
    To win on Sunday without facing a run-off, Fernandez needs to win 45 percent of the vote, or just 40 percent with a lead of at least 10 percentage points over the nearest challenger.
  • Copyright Holder: REUTERS
  • Copyright Notice: (c) Copyright Thomson Reuters 2011. Open For Restrictions - http://about.reuters.com/fulllegal.asp
  • Usage Terms/Restrictions: None
Register