Argentina's Economy Roars Ahead In November

Source: WSJ
By: Taos Turner

01.21.2011

BUENOS AIRES (Dow Jones)--Argentina's November proxy gross domestic product surged by 9.8% on the year and rose 1.6% on the month, the national statistics institute, Indec, reported Friday.

Economists surveyed by Dow Jones Newswires expected the government to report an 8.4% year-on-year gain in its Monthly Estimate of Economic Activity, or EMAE in its Spanish acronym.

The monthly economic indicator is a proxy for gross domestic product, which is reported on a quarterly basis.

Argentina's economy grew 9% during the first 11 months of the year over the same period in 2009, according to Indec.

GDP in the third quarter expanded 8.6% on the year and the government is forecasting roughly 9% growth in 2010. The central bank expects a 3.5% to 6.5% expansion in GDP in 2011.

The growth numbers for 2010 contrast sharply with a notable slowdown in 2009, amid the global financial crisis.

Official Indec data put 2009 growth at 0.9%, but economists say the economy probably shrank by somewhere between 1% to 4%.

Whatever the real numbers are, Argentina's economy is booming on rapidly rising industrial production, strong domestic demand for goods and services and solid international demand for Argentine commodities.

In November, Argentina's industrial production surged, pushed by heavy output from car makers and steel producers.

According to the manufacturers chamber UIA, industrial production in November was up 13.9% on the year in seasonally adjusted terms. In the first 11 months of 2010, industrial production rose 12.3%, while the month-on-month gain in November was 4.7%.

Industrial production fell sharply in 2009, as demand slumped due to the international financial crisis, but has roared back so far this year on surging demand both at home and from top trade partner Brazil.

According to the UIA, November vehicle output was up 36% on the year, setting a record. Steel production was up 22%, while food and drink output rose 13.7%.

A leading economic indicator compiled by Torcuato di Tella University, or UTDT, in November posted a record high, rising 4.2% on the month and bringing the gain over the past 12 months to 33.3%.

According to UTDT, the results point to continued growth over the following months.

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