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Montevideo, November 18th 2018 - 05:53 UTC

Argentine economic activity expands 8.1% in May; 8.9% in five months

Tuesday, July 19th 2011 - 05:59 UTC
Full article 2 comments
Again the auto sector, steel and construction were the best performers Again the auto sector, steel and construction were the best performers

Economic activity in Argentina expanded 8.1% in May over a year ago and 8.9% in the first five months of the year according to the country’s Statistics and Census Office, Indec.

The indicator, known by its Spanish acronym as Emae, takes into account most of the components used to calculate GDP.

The Emae May indicator was boosted by industrial activity which soared 9% in May compared to the same month last year. This was basically achieved because of the good performance of the automobile sector, steel production and minerals linked to construction activities.

More specifically the auto sector soared 28.7%, steel, 10.2% and tyres, 14%. Minerals linked to construction such as cement increased 19.6%, glass, 10.7% and other materials, 11.4%.

The Argentine economy also expanded strongly because the foreign trade surplus in May this year was 1.68 billion US dollars compared to 1.9 billion a year ago

This meant that during May exports increased 24% to 8.04 billion dollars, while imports jumped 39% to 6.4 billion, compared to a year ago. But the rise in imports was linked to the purchase of capital goods.

Construction again played a leading role having expanded 14% in May 2011 over May 2010, which was the highest inter annual record so far this year, reports Indec.

The highest previous was December 2010 with 20%.

However consumption was less dynamic according to May sales in supermarkets and shopping malls. In the first case sales were up 14% over a year ago, but only 1% compared to April. Similarly with shopping malls, 10.3% May to May but down 0.6% over April.

Strong demand for Argentina's grains and manufactured goods abroad and elevated government spending are fuelling a major expansion in Latin America's third-largest economy.

Deputy Economy Minister Roberto Feletti said the government's latest forecast is for an 8.2% expansion in the economy this year. That comes on the heels of 9.2% in 2010.

However, an overheated economy and lax monetary policy has translated into one of the highest levels of inflation in the Western Hemisphere. Most private-sector forecasts put annual inflation at above 20%.

Last week Eclac, the Economic Commission for Latin America and the Caribbean, estimated that the Argentine economy would expand this year, 8.2%, the highest in the region only second to Panama with 8.6%.

The 2011 GDP expansion for South America has been estimated at 5.1%.

 

Categories: Economy, Argentina.

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  • Redhoyt

    Hmmm .... interesting !

    http://www.ft.com/intl/cms/s/0/809d7abe-b174-11e0-9444-00144feab49a.html?ftcamp=rss#axzz1SVaR4Wpf

    Jul 19th, 2011 - 09:13 am 0
  • Forgetit87

    I don't see anything interesting in the link. As is typical for the Financial Times, it tries to prove a thesis adopted a priori - in this case, that Argentina's recovery is owed mostly to the 'commodities boom' - by resorting to stereotypes while refusing to disclose numbers.

    “...[T]he boom owes much to global factors...”

    Then the author parades some stereotypes on Argentina's export sector: China's demand for commodities; Brazil's demand for cheap Argentinian cars.

    However:
    1 - Unlike most other South American couries, Argentina's terms of trade with China has decreased over the last 5 years;
    2 - Brazil has a trade surplus with Argentina, and Brazilian exports to Argentina grow more than Argentinian exports to Brazil. That means that trade with Brazil actually has a negative impact on Argentina's growth;
    3 - and most importantly, Argentina's current account surplus is far too small (less than 1% of GDP in 2010) to argue that its economy is export-dependent. By comparison, countries known to rely on export to maintain growth - eg, Germany, Saudi Arabia, Norway, Venezela, China, Malaysia - had current account surpluses that ranging from 5 to 30% of GDP in 2010.

    Jul 20th, 2011 - 02:30 am 0
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