By: Shane Romig
("UPDATE: Argentina Consumer Confidence Surges Amid Economic Boom" published at 12:46 p.m. EDT incorrectly stated that the March gain is relative to a year earlier in the second paragraph. The gain is relative to a month earlier. The corrected version follows.)
BUENOS AIRES (Dow Jones)--Argentina's consumer confidence is approaching an all-time high following a year of blistering economic growth and signs that the economy is on track for another broad expansion this year.
Consumer confidence in March surged 6.3% on the month, settling just 5.9% below the record set in January 2007, according to a survey conducted by Torcuato di Tella University, or UTDT. Residents are more predisposed to buy cars and homes than at any point over the past 11 years, UTDT said.
Argentina's gross domestic product expanded by 9.2% last year and the central bank expects it to jump at least 6% this year, due largely to high private consumption.
According to local think tank Abeceb.com, consumer spending is likely to jump 27% in 2011 due to steep salary and pension increases, expanding consumer credit and as a hedge against inflation. With inflation running at an annual rate of about 25% according to economists, residents frequently pour cash into real estate, cars, appliances, or other goods which tend to hold value.
Despite the inflation worries, Argentines are the most optimistic they've been since before the global financial crisis shook confidence in 2009. That's good news to President Cristina Fernandez, who's expected to run for re-election in October.
The UTDT survey also found that the macroeconomic expectations index in March was up 3% on the month, with a 4.1% gain in short-term expectations and 2% gain in medium-term prospects. The index is up 66.9% on the year and up 8.8% from three years ago.
Survey participants are also more optimistic about their personal economic situation, with UTDT's index rising 4.7% on the month. Resident's personal economic expectation index has risen 33.2% from a year ago.
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