MercoPress. South Atlantic News Agency

Argentine economy breaks production and job records

Argentine president Cristina Fernandez de Kirchner administration might have mid term energy problems incubating but the latest data indicates that the Argentine economy keeps steaming ahead with increased employment and record industrial production. Trade surplus in January was also unexpectedly high.

Industrial output in January expanded at the greatest pace since April 2005, while fourth-quarter unemployment hovered near a 15-year low, proof the country's economic boom continues, the government said last week. Industrial production rose by 12.6%, on a non-seasonally adjusted basis, well above the 8.9% median forecast. "Sectors which showed the greatest growth rates in January 2008 from January 2007 are the automotive sector, steel and aluminum and tobacco products," the INDEC statistics office pointed out in a statement. Activity in the automobile industry shot upward by 131% year-on-year, INDEC said, boosted in part by output from a reopened Italy's Fiat plant. At the same time, production of raw steel and primary aluminum jumped a combined 26.6% and cigarette output 20%. January's overall industrial output rose 0.5% from December, and also gained 12.6% from January 2007. On unemployment, the fourth-quarter jobless rate fell to 7.5% with Argentina entering its sixth straight year of economic growth. It was the lowest since October 1992 and was down from 8.7% in the last quarter of 2006. Unemployment was reported at 8.1% in the third quarter, although the controversial INDEC was forced to release an estimate in that case after worker strikes and other difficulties limited data collection efforts. The INDEC fourth quarter index of 7.5% had been anticipated by President Cristina Fernandez de Kirchner several weeks ago. Another encouraging piece of information was the January trade surplus that reached 1.164 billion US dollars in January as the value of exports soared 67% compared to the same month a year ago. The Jan trade surplus was narrower than the 1.79 billion US dollars surplus in December but more than double the 436 million surplus of January 2007. Mrs. Kirchner said imports grew 52% in January from a year earlier. High prices for Argentine commodities, soy, wheat and corn, have spurred export growth, and imports have jumped as five years of vigorous economic expansion have spurred both business and consumer spending. However the full-year 2007 trade surplus narrowed to 11.15 billion US dollars, the lowest level since 2001. Fuelled by strong demand for exports and domestic consumption the Argentine economy expanded 8.7% in 2007. This was the fifth year running the economy grew in excess of 8%. Last December the economy expanded 9.7% over the same month in 2006 and 0.6% over November 2007.