MercoPress. South Atlantic News Agency

Argentine economy expanding at an annualized 9.4%

Economy Minister Martín Lousteau

The Argentine economy grew a robust 9.4% in the 12 months ending in October, reported the government on Thursday. A survey of 11 analysts had forecast Argentine growth at a median of 8.9%, with estimates ranging from 8.5 to 9.8%.

In the same period a year ago Jan-Oct. 2006, the Argentine economy grew 8.5% showing it is poised to record a fifth straight year of growth above 8%. The Argentine government's economic activity index, which includes most elements of gross domestic product, showed 0.3% growth in October from September. "The bedrock of the economic expansion remains the robust consumer spending and there are no signs of slowing on that front as supermarket sales continue to post double-digit growth" said investment bank Morgan Stanley in a report "However, with a looming US recession and accelerating domestic inflation, the downside risks to growth in 2008 are significant" added the investment bank. Late Wednesday night Economy Minister Martín Lousteau said that it is possible to sustain this rate of economic growth. "Of course these growth rates are sustainable and we are working on maintaining them. Argentina is growing at an unusual rate and it is a moral duty to grow sustainably while there is poverty in the country," the minister said in a televised interview. Industrial production jumped 9.5% in October, and analysts say some factories may be speeding up production in anticipation of an energy supply crunch during the summer, when air-conditioning use surges. Some analysts also say growth figures may be inflated by government under-reporting of inflation, since the growth figures are adjusted for price increases. Widespread doubts have plagued official inflation numbers since January, when the government replaced the head of the consumer price index office with someone seen as a political ally. Inflation readings have generally come in lower than expected since then. In related news the National Statistics and Census Institute, Indec, revealed that Argentina's total foreign debt (public and private) reached 118.7 billion US dollars in the third quarter of 2007, which represents an annual increase of 10.25 billion US dollars increase.