Financial Times

February 22, 2013
By Jude Webber

Argentina’s debt management is going to be firmly in the spotlight next Wednesday, when it squares off against so-called “vulture funds” in a New York appeals court in the pari passu case that, in the worst-case scenario, could spell a fresh default.

That’s a story for another day. But while we’re on the subject of Argentina’s debt policy, Luis Secco, an independent economist, has had a closer squint at the government’s record on debt reduction – a key tenet of government policy.

The official record is simple: Argentina has slashed debt and acted so prudently that Hernán Lorenzino, the economy minister, now sees fit to berate the province of Buenos Aires in a storm of tweets for seeking to issue debt to meet pay rises.

But Secco, in a note to clients, says that’s not quite the whole story. He notes that Argentina’s debt-to-GDP ratio officially fell to nearly 37 per cent by June last year from nearly 109 per cent in 2003 when Néstor Kirchner, the late husband and predecessor of current president Cristina Fernández, took office.

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