March 12, 2001

Argentina to comply with IMF fiscal targets

                  BUENOS AIRES, Argentina (AP) -- Argentina's new economy minister has said
                  the country intends to comply with the cost-cutting measures and deficit
                  reduction targets set as part of a $40 million International Monetary Fund
                  emergency aid package.

                  In his first public comments since assuming office last week, Ricardo Lopez
                  Murphy said among his priorities will be to trim Argentina's budget and curb
                  spending -- key elements for the country to maintain access to the emergency
                  funds made available in December.

                  Fiscal goals related to the budget, the spending freeze, "and the agreements with
                  the IMF have to be met," Lopez Murphy was quoted as saying in an interview
                  with the Argentine daily, Clarin.

                  Last year's IMF-led rescue package calls on Argentina to reduce its budget
                  deficit for this year to $6.5 billion. But economic data released last month
                  showed a slowdown in industrial production and higher-than expected
                  government spending may complicate its ability to meet the target.

                  An IMF delegation is to travel to Buenos Aires later this week to review the
                  country's accounts.

                  Lopez Murphy is expected to announce new measures aimed at jump-starting the
                  faltering economy -- now mired in a 32-month recession -- within the coming
                  days. An emphasis on increasing tax collections and reducing government
                  spending are expected to among the initiatives

                  Argentine businessmen have urged Lopez Murphy to include tax breaks as part
                  of his plan. He said Sunday the government would move to ease hefty tax
                  burdens once South America's second-largest economy begins to grow again.

                  Whatever reforms Lopez Murphy proposes, he is likely to face resistance from
                  opposition lawmakers and the country's powerful unions, both of whom worry
                  about cuts in social spending.

                  Copyright 2001 The Associated Press.