October 22, 2018 / 4:21 PM / a month ago

UPDATE 2-Argentina's fiscal tightening takes deficit closer to target

(Adds comments from Treasury Minister, background)

BUENOS AIRES, Oct 22 (Reuters) - Argentina is on track to meet its 2018 year-end spending targets, the country’s treasury minister said on Monday, after it posted a deficit that was 31 percent narrower compared to this time last year.

Argentina posted a fiscal deficit of 22.9 billion pesos ($622 million) in September, bringing the deficit to 153 billion pesos ($28 billion) in the first nine months of 2018.

That was equivalent to 1.1 percent of Argentina’s gross domestic product, putting it on track to beat the 2.6 percent year-end deficit target the government set earlier in the year, Treasury Minister Nicolas Dujovne said.

“In the first nine months of the year, spending has contracted 7 percent when compared to the same period last year. We are at the lowest level of government spending since 2012,” Dujovne told reporters at a conference in Buenos Aires.

Argentina revised its deficit targets in September after a sharp devaluation in the peso led the country to secure a $57 billion stand-by financing agreement with the International Monetary Fund, the largest in the Fund’s history.

President Mauricio Macri’s government has introduced fiscal belt-tightening by increasing taxes and rolling back subsidies on public utilities, moves that have faced push back from unions and political opposition groups. (Reporting by Scott Squires Editing by Chizu Nomiyama and Rosalba O’Brien)

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