Argentina continues to go forwards - on the back of the China boom? But then, when you've been so low the only way is up.
Argentina's economy likely expanded for a third consecutive quarter in the July through September period, led by an increase in investment and consumption.
Gross domestic product, a measure of a country's output of goods and services, probably rose 8.6 percent in the third quarter from the same year-ago period, it's biggest increase since the fourth quarter of 1996, according to the median estimate of 16 economists surveyed by Bloomberg. Argentina's economy grew 7.6 percent and 5.4 in the past two quarters.
``We have invested $2.5 million to increase output as we've been working at full capacity,'' said Rosana Negrini, chief executive at Agrometal SA, an agricultural equipment manufacturer in the central province of Cordoba, 500 kilometers (311 miles) west of Buenos Aires. ``We expect to increase production 50 percent next year to respond to higher demand,'' she said. The government plans to publish GDP figures today.
The government raised its 2003 economic growth forecast to more than 7 percent, the fastest pace in Latin America, based on a pickup in consumption and investments, said Economy Minister Roberto Lavagna this month. The government had forecast 3 percent growth in its proposed 2003 budget after the devaluation and default on $95 billion in debt led to an 11 percent contraction in 2002. Central bank chief Alfonso Prat-Gay yesterday said the economy will grow more than 5 percent in 2004.
``The country's devaluation and lower costs in U.S. dollars prompted new investments to increase production,'' said Matias Silvani, a director of Latin American Macroeconomic and strategic research at UBS Warburg LLC in Stamford, Connecticut. The country's exports have risen 16 percent this year, led by a boom in soybean shipments, which rose to 8.4 million tons from 5.9 million tons in 2002, according to the cereal stock exchange in Buenos Aires.
Industrial production, construction activity, car sales and supermarkets sales all are up this year as slower inflation and a stable exchange rate helped lift demand, the government said. Inflation has risen 3.6 percent in 2003 from 41 percent in 2002.