Despite growing investor concern over Argentina’s economic and fiscal outlook, the government is determined to meet this year’s $4.7 billion fiscal deficit target set by law, and agreed upon with the International Monetary Fund (IMF).

Investors became worried in August because slower-than-expected economic growth has kept tax revenue below official forecasts, making it difficult for the government to meet this year’s deficit goal. Meeting the target is a condition of a $7.2 billion, three-year standby loan from the IMF.

Economy Minister Jose Luis Machinea said that Argentina could miss the target by $500 million because of weak tax collection. But he said that would be of “little relevance.”

“The problem would be if Argentina had problems in its relations with the IMF, but this is not the case,” Machinea said. “It would also be worrisome if Argentina threw its piggybank out the window with expenditure, which is not happening.”

On the contrary, Machinea noted that the government estimated that federal expenditures through August were between $300 million and $400 million below levels agreed upon with the IMF.

“Moreover, the markets are expecting a fiscal deficit of between $5.5 billion and $6.0 billion,” said Machinea. “But we will be below that, so there won’t be any surprises.”

Source: Consulate of Argentina, Toronto, Ontario, Canada.