(Refiles to fix typo in headline)
By Karina Grazina
BUENOS AIRES, Feb 12 (Reuters) - President Cristina Fernandez has implemented a battery of measures to boost consumer spending, even urging Argentines to shop to save their jobs, but slumping confidence in the government is undermining her drive.
High inflation, a paucity of credit, signs of a slowing economy and a long conflict between the government and the key farming industry have led Argentines to keep a tight grip on their wallets.
The Argentine economy is expected to cool, or possibly shrink this year, as the global economic downturn saps demand for the country's agricultural exports.
"The truth is that you never know what's going to happen here," said Natalia, a 27-year-old food company saleswoman, who suspended plans to remodel her house.
"I don't know what they are going to decide tomorrow so the only thing that I can do is spend less to be prepared in case something does happens," she said.
Sales growth at supermarkets and shopping centers has sagged in recent months, dragging on an economy heavily reliant on domestic consumption.
In December, supermarket sales grew 13 percent from the same month of 2007, but that was the slowest rate of growth in 19 months. December supermarket sales dropped 3 percent from November, at constant prices.
SPECIAL DEALS
Fernandez has announced special deals financed by state-subsidized loans on cars, washing machines and other appliances to boost industry and get people to shop, but so far many of the products are not available.
Appliance manufacturers and car makers participating in the programs must pledge not to lay off employees.
But recent hikes in residential electricity rates, transportation costs and private school tuition among other things have undercut the government's attempts, especially among the middle class.
The surprise government nationalization late last year of the private pension fund system also raised worries of possible economic turmoil among Argentines.
Consumer spending has cooled even though Argentina has yet to suffer huge layoffs seen in other countries. But Argentines are bracing for fallout from the crisis, analysts say.
"Despite the fact that there has not been a big fall in real salaries ... and there has not been a big rise in unemployment ... consumption has fallen due to the fall in expectations," said Dante Sica, economist with Abeceb consulting firm.
"The outlook for 2009 is not promising," he said.
Some economists say the government isn't doing enough to stoke spending by a key group: low-income workers.
"They need to come up with measures more focused on the lower-income sectors," said Bernardo Kosacoff, director of the U.N. Economic Commission for Latin America and the Caribbean in Buenos Aires.
"It would have a strong impact because anything you give them will go to consumption," he said.
SHOP OR LOSE YOUR JOB
Fernandez last month urged Argentines to keep spending to avoid a "self-fulfilling prophecy" by slowing the economy further in the global downturn.
"Those of you who have the money but are afraid to spend it because you're worried about maybe losing your job, I have to tell you that if you don't keep consuming, you will end up losing your job," she said.
Soaring interest rates and a lack of credit have also contributed to Argentines scaling back consumer spending.
"Today, the only credit available is through credit cards. You can't take out a personal loan or even a mortgage," said Sandra Gonzalez, the president of the Adecua consumer group.
Argentines' economic expectations began to deteriorate last March, when a conflict between the government and farmers erupted into a political crisis, triggering capital flight and denting the economy. (Writing by Kevin Gray; Editing by Fiona Ortiz and James Dalgleish)