The ratings reflect the increasingly severe economic and social challenges Argentina faces in balancing the federal budget. Low tax revenues for September and the likely need for $900 million in additional spending cuts highlight the mounting challenges the government faces in implementing its fiscal program. Standard&Poor's believes that despite the commitment of the federal government, prospects for achieving the "zero deficit" budget goal for 2001 and maintaining budgetary austerity in 2002 while ensuring timely debt service has continued to wane since the policy was announced on July 11, 2001. Thus far, the Republic has met its monthly budgetary objectives in part by accumulating arrears of $480 million of transfer payments due to the provinces. Low consumer confidence, the
