MercoPress. South Atlantic News Agency

Argentina growing above estimates

Economic activity in Argentina expanded in February 8,6% compared to the same month a year ago and 0,1% over last January, accumulating 8,8% over Jan/Feb 2004 according to the latest data from the Statistics and Census Office.

Data also shows that the Argentine economy has been growing uninterruptedly for 27 months since December 2002. Argentina's GDP expanded 8,8% in 2003; 9% in 2004 and the 2005 budget was calculated on an estimated growth of 4%. However private estimates believe the index will be closer to 7% and Economy Minister Roberto Lavagna back from United States said Tuesday that 6% is a more adequate since it will enable "equilibrium between investment and consumption levels" without generating too much pressure and "helping to keep inflation under control".

"To keep growing at 9% we need investment rates of 35 to 40%, and the current rate is 21% which we should help push to 23%, said Mr. Lavagna.

A further encouraging figure was industrial production which last March surged 8,7% compared to the same month in 2004 and 4,1% over February with an accumulated first 2005 quarter expansion of 6,1% over a year ago and 4,1% over the fourth quarter of last year. The automobile industry with a 30,5% growth in the first quarter, together with the construction industry are the most dynamic, although all sectors, with the exception of the tobacco industry are growing.

Industrial capacity performance in March reached 71%, which is 2,1% over February and industrial employment in the first quarter 2005 jumped 7% compared to a year ago.

"The strengthening of domestic demand, a competitive exchange rate and active policies have created conditions to keep advancing in the re-industrialization of Argentina", said Industry Secretary Miguel Peirano.

Private economists and agents also pointed out that industrial production in the first quarter of 2005, for the first time surpassed the second quarter of 1998 which has been taken as a benchmark index.

Government finances also seem to be consolidating according to the latest figures which indicate that in the first quarter of 2005 the primary surplus was over 4,2 billion pesos. Total surplus for 2005 has been estimated in 14,2 billion pesos.

"The first quarter primary surplus was 260 million pesos above the same period in 2004 and government expenditure in the first quarter 21% of annual estimate", underlined Finance Secretary Carlos Mosse.