MercoPress. South Atlantic News Agency

Kirchner denies recession and insists Argentina continues to expand

Kirchner promised economy will keep growing

Two reliable private consultants and advisors confirmed that the Argentine economy has gone through two consecutive negative quarters, thus in recession. However former president Nestor Kirchner denies any recession and insists that the Argentine economy keeps expanding.

Orlando Ferreres y Asociados said that activity in March was 2.4% down compared to a year ago which means that for the second consecutive quarter activity has been falling: 3.5% in the first quarter of this year and 2.2% in the fourth quarter of 2008.

More specifically on March, Ferreres & Associates says that the slowdown begun last November at a rate between 3% and 5%, although in March it was lower. This could be attributed to a 9% increase in cement production (for the construction industry) and a lesser fall in the automobile industry. Besides March 2008 was when the farm dispute and strikes begun.

Manufacturing was the hardest hit sector having contracted 7.9% in March, following 8.3% in January and 12.3% in February with a first quarter average loss of 9.4% and in the last twelve months, 7.9%.

Retailing in March dropped 8%, pushed by poor manufacturing performance and significant reduction in foreign trade. The Argentine farming sector contracted 3.1% in March, when the freeze on cattle and grains trade, but the construction industry bounced back 3.1% after falling five months.

“We shouldn’t be ashamed of supporting domestic demand, of recovering what was taken from us. Growth in Argentina will continue, the latest data show we are not in recession, not even a slowdown: we continue to expand, the economy is back on its tracks in spite of the global situation”, said Mr. Kirchner during a political rally in the province of Buenos Aires.

“Argentina is overcoming with strength and dignity the international crisis, and expansion will continue as it has been shown by a 5% increase in energy demand”, he underlined.

But in spite of President Cristina Fernandez de Kirchner husband words, the indicators from the Universidad del Salvador also show Argentina is in recession.

“During March economic activity was below the historical average tendency for the seventh consecutive month, which is again evidence that the Argentine economy has been in recession since last October”, says the University’s report.

In the third month of 2009, the activity index was down 0.31, following on the negative index of the previous month, 0.23.