MercoPress. South Atlantic News Agency

Argentina completes four years running of economic growth

Argentina's GDP expanded 8.5% in 2006 completing four full years of recovery following the default and melting of the economy in 2002, according to official statistics released in Buenos Aires.

Data from the Statistics and Census Institute shows that economic activity in the fourth quarter of last year improved 1.8% over the third quarter and 8.6% compared to the same period in 2005. In the fourth quarter the average production sector experienced an 8.5% expansion on a year to year basis boosted by construction (15%) and manufacturing (8%). Public (government) services registered an 8.4% annualized increase particularly influenced by the financial sector, 22.6%, and 14.4% in the transport, storage and communications sectors. Prices in the 2006 fourth quarter soared 12.7% compared to the same period in 2005, although in the production sector the increase was 8.9%, while in services the prices variation reached 14.8%. Global supply also had a positive evolution with an annualized expansion of 9.4% and so did demand based on domestic investment (14%), exports (13.1%) plus private and government consumption (7.5% and 4.2%). Of the global demand evolution the most dynamic compared to a year ago was gross domestic investment, particularly the purchase of production goods (16.5%) and construction (12.4%). Following the debacle at the end of 2001 which caused a 10.9% collapse of economic activity in 2002, Argentina's GDP expanded 8.7% in 2003; 9% in 2004; 9.2% in 2005 and 8.5% in 2006. Last year's growth more than doubled the 4% target which was included in Argentina's federal budget. For 2007 the government has equally estimated 4% growth but private analysts and multilateral organizations forecast 7%.