BUENOS AIRES--President Cristina Kirchner's economic team signaled this week that the administration will keep in place the policies that some observers say contributed to her ruling coalition's poor showing in congressional primary elections.
Sunday's vote largely erased any chances that Mrs. Kirchner's ruling coalition will be able to change constitutional term limits so she could seek a third term in 2015.
Now, Argentina watchers are looking for signs as to whether the 60- year-old populist will radicalize her policies or adopt more conventional measures to address high inflation and hard currency shortages that have sapped economic growth and dented her popularity.
Critics of the government say that Mrs. Kirchner and her husband and predecessor, Nestor Kirchner, spent the windfall revenue from almost a decade of high prices for Argentina's agriculture exports with little to show for it.
Mrs. Kirchner and her supporters say government spending and import substitution policies fostered years of rapid economic growth that created more than five million jobs.
"That 7% annual growth in the last 10 years isn't the result of tail winds. It's the result of an economy directed by a government with objectives that is prepared to do what it has to do to meet those objectives," Deputy Economy Minister Axel Kicillof said at a seminar Thursday.
Mr. Kicillof said orthodox policies such as cutting public spending and borrowing from international debt markets don't work. His comments are the latest in a string of public appearances this week by Mrs. Kirchner's top economic advisers after her Victory Front coalition suffered a stunning defeat in the primaries.
On Wednesday, Economy Minister Hernan Lorenzino and Central Bank President Mercedes Marco del Pont defended the administration's policies, which emphasize paying down foreign debt with central bank reserves, greasing the economy with ample fiscal spending, and state regulation of the foreign exchange market.
The central bank intervenes in the exchange market on an almost daily basis as it tries to buy dollars to build its foreign currency reserves, while gradually weakening the peso to help exporters. The central bank has allowed the peso to weaken at a faster pace this year, but the authorities have repeatedly denied that a politically poisonous currency devaluation is an option.
Mrs. Marco del Pont criticized unnamed political opponents who allegedly want the government to cut spending and devalue the peso, implying that a devaluation isn't the way to improve the competitiveness of the economy. Mrs. Kirchner will likely have her hands full dealing with mounting economic problems during her last two years in office.
Consumer prices are on track to rise more than 20% for a fourth consecutive year as the central bank keeps interest rates low and prints money to finance the government. Following a meager 1.9% expansion in 2012, Mrs. Kirchner has said the economy will grow at least 3.5% this year. But many economists say the government overstates growth.
Even though she's a lame duck, Mrs. Kirchner is still a force to be reckoned with thanks to a constitution that grants the executive branch broad powers to govern, with or without the backing of Congress. She can regulate prices, impose capital controls, and roll over the federal budget by decree, among other measures.
Angered by inflation and perceptions of rampant crime, Argentines backed opposition candidates Sunday in key districts like the capital, and the provinces of Buenos Aires, Mendoza, Cordoba and Santa Fe in primaries that were widely seen as a proxy for midterm elections in October.
The Victory Front and its allies received around 30% of the national vote. Many observers had expected the Victory Front to win at least 35%--a significant drop in support after Mrs. Kirchner was elected to a second term with 54% of the vote in 2011.
Observers say that Mrs. Kirchner will be hard-pressed to boost the Victory Front's chances Oct. 27. Though her leftist coalition will probably remain the single-largest force in Congress, the Victory Front could lose its slim majority in the Senate and along with it Mrs. Kirchner's control over the legislative agenda.
"The executive has so much power. If really need be they can govern without the Congress," says political analyst Federico Thomsen.
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Sunday's vote largely erased any chances that Mrs. Kirchner's ruling coalition will be able to change constitutional term limits so she could seek a third term in 2015.
Now, Argentina watchers are looking for signs as to whether the 60- year-old populist will radicalize her policies or adopt more conventional measures to address high inflation and hard currency shortages that have sapped economic growth and dented her popularity.
Critics of the government say that Mrs. Kirchner and her husband and predecessor, Nestor Kirchner, spent the windfall revenue from almost a decade of high prices for Argentina's agriculture exports with little to show for it.
Mrs. Kirchner and her supporters say government spending and import substitution policies fostered years of rapid economic growth that created more than five million jobs.
"That 7% annual growth in the last 10 years isn't the result of tail winds. It's the result of an economy directed by a government with objectives that is prepared to do what it has to do to meet those objectives," Deputy Economy Minister Axel Kicillof said at a seminar Thursday.
Mr. Kicillof said orthodox policies such as cutting public spending and borrowing from international debt markets don't work. His comments are the latest in a string of public appearances this week by Mrs. Kirchner's top economic advisers after her Victory Front coalition suffered a stunning defeat in the primaries.
On Wednesday, Economy Minister Hernan Lorenzino and Central Bank President Mercedes Marco del Pont defended the administration's policies, which emphasize paying down foreign debt with central bank reserves, greasing the economy with ample fiscal spending, and state regulation of the foreign exchange market.
The central bank intervenes in the exchange market on an almost daily basis as it tries to buy dollars to build its foreign currency reserves, while gradually weakening the peso to help exporters. The central bank has allowed the peso to weaken at a faster pace this year, but the authorities have repeatedly denied that a politically poisonous currency devaluation is an option.
Mrs. Marco del Pont criticized unnamed political opponents who allegedly want the government to cut spending and devalue the peso, implying that a devaluation isn't the way to improve the competitiveness of the economy. Mrs. Kirchner will likely have her hands full dealing with mounting economic problems during her last two years in office.
Consumer prices are on track to rise more than 20% for a fourth consecutive year as the central bank keeps interest rates low and prints money to finance the government. Following a meager 1.9% expansion in 2012, Mrs. Kirchner has said the economy will grow at least 3.5% this year. But many economists say the government overstates growth.
Even though she's a lame duck, Mrs. Kirchner is still a force to be reckoned with thanks to a constitution that grants the executive branch broad powers to govern, with or without the backing of Congress. She can regulate prices, impose capital controls, and roll over the federal budget by decree, among other measures.
Angered by inflation and perceptions of rampant crime, Argentines backed opposition candidates Sunday in key districts like the capital, and the provinces of Buenos Aires, Mendoza, Cordoba and Santa Fe in primaries that were widely seen as a proxy for midterm elections in October.
The Victory Front and its allies received around 30% of the national vote. Many observers had expected the Victory Front to win at least 35%--a significant drop in support after Mrs. Kirchner was elected to a second term with 54% of the vote in 2011.
Observers say that Mrs. Kirchner will be hard-pressed to boost the Victory Front's chances Oct. 27. Though her leftist coalition will probably remain the single-largest force in Congress, the Victory Front could lose its slim majority in the Senate and along with it Mrs. Kirchner's control over the legislative agenda.
"The executive has so much power. If really need be they can govern without the Congress," says political analyst Federico Thomsen.
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