Congressman sees major rates hikes in 2004 budget

Argentine lower house representatives believe a significant increase in regulated rates is "hidden" in the government's budget for 2004, presented by finance minister Roberto Lavagna Wednesday to the lower house budget and finance commission. "Either the government is being too optimistic, or next year there will be a significant increase in rates, higher than that envisaged," Aldo Olstropolsky, representative for the Radical party, was quoted as saying by the Infobae newspaper. Lavagna's budget proposal envisages economic growth of 4% in 2004, an average exchange rate of 2.84 pesos to the US dollar and inflation of about 9% for the year. The budget aims to generate a surplus of about US$12.5bn during 2004, which will help the country begin to meet some of its obligations after defaulting on US$132bn of debt in early 2002. The budget includes important changes to the tax system, making it more "progressive and [allowing greater] redistribution" Lavagna was quoted as saying. During a lunchtime television show Tuesday, Lavagna had referred to private companies as "insatiable" and denied significant rates hikes. But he singled out current natural gas prices as being low compared to international levels.