Argentine president Eduardo Duhalde has said his country is showing signs of emerging from the economic meltdown which has gripped it for most of the past year.

"The worst of the crisis is over, and we can now see a little light of hope. Let's strengthen that little light," he said on Friday at a swearing in ceremony for two new ministers.

Mr Duhalde's comments echo remarks last week from economy minister Roberto Lavagna, who said international lenders had underestimated Argentina's economic strength.

In recent weeks, Argentine interest rates have fallen, while industrial production has picked up, fuelling hopes that the country could be starting on the road to recovery after more than four years of recession.

Meltdown

The Argentine economy was plunged into chaos late last year after the cash-strapped government defaulted on part of its $140bn debt.

As foreign investors took flight, the government allowed the peso to float freely against the dollar.

It also barred bank account holders from withdrawing their savings in an attempt at staving off a collapse of the banking system, inflicting serious economic hardship on the population.

Mr Duhalde's upbeat assessment of the economy could be designed to encourage the International Monetary Fund to resume lending to Argentina.

The institution cut off all financial aid to Argentina late last year, and has said the country must push through a package of economic reforms, including spending cuts, before loans can resume.

Election year

But Mr Duhalde's government, an interim administration which stepped in after violent street protests led to the downfall of two governments earlier this year, is worried that further austerity measures would lead to an increase in social unrest.

The country still faces considerable economic problems, with unemployment running at over 20% and total output expected to shrink by about 15% this year.

Mr Lavagna is expected to fly to Washington for a fresh round of talks with the IMF soon.

Argentine voters are due to go to the polls to elect a new president on 30 March next year.