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Argentina’s Economy Grew 8.6% in the Third Quarter

Source: Bloomberg
By: Eliana Raszewski

Argentina’s economy grew 8.6 percent in the third quarter from a year earlier, down from the 11.8 percent growth rate in the second quarter, the National Statistics Institute reported today in Buenos Aires.

The economy expanded 0.4 percent from the second quarter, the agency said. Economists expected year-over-year growth of 8.3 percent, according to the median estimate from 10 analysts surveyed by Bloomberg.

A record soybean harvest of 55 million metric tons and booming auto output and exports are helping South America’s second-biggest economy rebound from last year’s 0.9 percent expansion, the lowest since 2002. According to the central bank, the economy will grow 9 percent this year, the most since 2005.

Economists including Alfredo Coutino of Moody’s Inc. see the economy slowing in 2011 as manufacturers reach full capacity and imports rise to meet increased consumption. Coutino forecasts the economy will expand 5 percent in 2011 after growing 8.5 percent this year.

“The growth in domestic demand is faster than the growth in local production,” said Coutino in a telephone interview from West Chester, Pennsylvania. “This is generating inflation and an increase in imports that tend to slow economic growth.”

Buenos Aires-based Ecolatina research company estimates consumer prices rose 27 percent in November from a year earlier, more than double the 11 percent reported by the national statistics institute.

Argentine manufacturers in November used 83.4 percent of capacity, the statistics institute said in a report published today. That’s the highest since January 2002, according to the institute’s website.

Coutino said growth in Latin America as a whole will slow to 4.5 percent in 2011 from 6 percent this year because of reduced demand for the region’s goods in the U.S. and Europe.

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