Argentina's Fernandez to take helm, faces inflation

By Kevin Gray

BUENOS AIRES, Dec 6 (Reuters) - Cristina Fernandez de Kirchner takes over from her husband as Argentina's president next week, facing stiff challenges in managing an impressive economic boom that he helped stoke.

Fernandez will become Argentina's first elected female leader when she succeeds President Nestor Kirchner on Monday in an unusual husband-to-wife power handover.

A popular first lady and leftist senator, Fernandez swept to victory in an Oct. 28 election by promising to continue the successful economic policies of her husband, who has overseen more than four years of vigorous growth topping 8 percent a year.

But she also inherits high inflation and acute energy shortages that threaten to hit investment and cool Argentina's biggest economic expansion in 100 years.

"If those two are not addressed, there is a risk that Argentina would experience a significant slowdown and that would completely change the political dynamics in the country," said Daniel Kerner, an analyst at Eurasia Group in New York.

The Kirchners' political success is deeply intertwined with Argentina's dramatic recovery from a 2001-02 economic crisis. Unemployment has dropped to a 15-year low, from more than 20 percent to 8.1 percent, and rapid growth had been fueled by a boom in consumer spending and agricultural exports.

Fernandez, who has drawn comparisons to U.S. presidential candidate Hillary Clinton, is expected to stick to her husband's main policies, emphasizing budget and trade surpluses, a weak currency to stimulate exports and increased state intervention in the economy.

INFLATION THREAT