(Adds context, analyst quotes)
By Hugh Bronstein and Alejandro Lifschitz
BUENOS AIRES, March 27 (Reuters) - Argentina said on Thursday its gross domestic product expanded 3.0 percent last year, below the 3.22 percent level that would have triggered about $3.5 billion in payments to holders of GDP bond warrants.
Warrants trading in the secondary debt market fell up to 13.7 percent after the government announced the figure.
Economy Minister Axel Kicillof said the 2013 growth data was calculated using 2004 as the base year, rather than 1993.
"Three percent growth is still very good considering the international context, which was complicated," Kicillof said.
If the government had used 1993 as the base, growth would have come in at 5.1 percent, triggering costly payments to warrant holders.
"The decision to make such a large revision to the GDP data confirms concerns about manipulation of the country's macroeconomic data," said Walter Molano, emerging markets analyst at U.S.-based BCP Securities.
But Siobhan Morden, New York-based head of Latin American strategy at Jefferies LLC, said the 3 percent growth figure is closer to the estimates of private economists than what it would have been under the previous base year.
"The pros versus cons argued in favor of downward revision of GDP growth to align with private sector estimates of 2.9 to 3.0 percent," Morden said.
Argentina issued GDP warrants, payable if growth in Latin America's No. 3 economy exceeds pre-set yearly levels, as part of debt restructurings that were negotiated in 2005 and 2010.
The bond revampings followed the country's 2002 sovereign default, which triggered an economic meltdown that pushed millions of middle-class Argentines into poverty.
More recently the country had been censured by the International Monetary Fund for publishing inaccurate economic data.
In January the Argentine government unveiled a new consumer price index. So far it has clocked inflation at a rate much closer to the estimates of private economists, who see prices soaring more than 30 percent higher per year.
Argentina's finances are still feeling the strain of having been cut off from the international capital markets since 2002. Loose fiscal policy has fueled one of the world's highest inflation rates while heavy-handed currency controls damage business confidence by cutting off access to U.S. dollars.
Moody's Investors Service earlier this month cut Argentina's government bond rating further into junk, saying a sharp drop in the central bank's dollar reserves has raised concerns about the country's ability to service its remaining foreign debt.
Reserves are down 33 percent over the past year to $27.1 billion. (Editing by G Crosse)