Argentina says economic activity flat in June
* June growth flat after May’s 0.5 percent yr/yr decline
* Private economists accuse gov’t of exaggerating growth
By Hilary Burke
BUENOS AIRES, Aug 17 (Reuters) – Argentina’s economic
activity was flat in June, topping market expectations for a 0.3
percent year-on-year contraction and beating even more
pessimistic private forecasts of a steep decline.
The government published its EMAE economic activity index
, a close proxy for gross domestic product, on
Friday. The data showed a 1.1 percent expansion in June versus
May.
Latin America’s No. 3 economy expanded 8.9 percent last
year. But growth is slowing sharply due to high inflation, a
sluggish world economy, waning demand from top trade partner
Brazil, lower grains output and the impact of new trade and
currency controls that have dented confidence.
The INDEC statistics institute said growth in the 12 months
through June was 5.3 percent. But many economists believe the
agency exaggerates annual growth by as much as 3 percentage
points, while also drastically low-balling inflation.
Although official growth data has been surprisingly negative
in recent months – narrowing the gap with private estimates -
the government’s June figure stands in stark contrast to the 3.9
percent drop in economic activity measured by the Orlando J.
Ferreres Associates consulting firm.
In May, INDEC reported the first year-on-year contraction
since July 2009, when the world was grappling with financial
crisis.
Eleven analysts surveyed by Reuters gave estimates for
June’s economic activity ranging from a 1.1 percent contraction
to 1.0 percent growth, with a median of -0.3 percent.
Industrial production sank in the month of June, dragged
down by weak Brazilian demand for Argentine cars.
In June 2011, economic activity grew 9.4 percent
year-on-year.
The government’s budget puts 2012 growth at 5.1 percent,
although most economists think it will be much lower and could
even show a contraction.
Economy Minister Hernan Lorenzino told reporters this week
that global economic weakness was not helping Argentina, but he
declined to say whether officials would cut the growth outlook.
Analysts now think the government will report 2012 economic
growth below the 3.26 percent threshold that would trigger a
roughly $4 billion payout on GDP warrants
in December 2013.
Article source: http://www.reuters.com/article/2012/08/17/argentina-economy-idUSL2E8JHHRG20120817
Posted by braziltribune
on Aug 18 2012 Filed under Market.
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