MercoPress. South Atlantic News Agency

Argentine economy expanded 9.1% in 2005

The Argentine economy expanded at a nerve breaking 9.1% in 2005, completing three years of explosive growth based on agriculture, the automobile industry and construction, reported Thursday the Central Bank.

The GDP of Latinamerica's third economy surged 8.1% last December compared to the same month in 2004, and in line with what had been forecasted by local market analysts. Actually analysts were expecting an 8.3% jump in December and 9% for the whole of 2005.

However a closer analysis of December shows a 0.3% expansion over November which is below the month to month average of 2005. The Argentine GDP increased 8.8% in 2003 and 9% in 2004. GDP in 2005 was estimated in 183 billion US dollars, but with an undervalued local currency.

Domestic demand and exports (which expanded 16%) were crucial for the sustained expansion as well as construction that in 2005 surged 14.5%. In 2006 the public works program is expected to help keep the level of activity. Industry last year expanded 7.7%. Analysts believe the financial and transport sectors which in the last quarter grew 19.8 and 15.1% should also contribute.

President Nestor Kirchner's administration is predicting a 4% expansion in 2006, but the Central Bank forecasts 6.2%. Private consultants believe the figure will be closer to 6.8%.