Econintersect: Argentina had one of Latin America’s swiftest growth rates in 2010, although private analysts say official data exaggerates the scope of the expansion. The government said on Friday (March 18) that GDP expanded 9.2% in the fourth quarter versus the same period of 2009 and grew 2.5% from the third quarter Private consumption jumped 11.5% in the fourth quarter, compared with the year-earlier period, according to the INDEC national statistics institute.
Argentina’s economy is driven by robust consumer spending, lucrative grains exports and industrial production, led by the automotive sector.
The trade surplus, however, has been shrinking as imports grow at more than double the rate of exports. High inflation is pushing up local production costs, and a fairly stable exchange rate reduces the relative cost of imports.
Inflation is masked in Argentina by widely discredited official data. Private estimates put annual inflation at around 25 percent versus the 10 percent reported by the government.
Analysts have said the inflation data also distorts economic growth figures, which are adjusted for inflation.
Strong growth is good news for President Cristina Fernandez, who is expected to run for a second term in October’s presidential election. She is stoking the economy with loose monetary and fiscal policy despite inflation.
“This raises the risk of a hard landing of the economy in 2012,” Goldman Sachs senior economist Alberto Ramos wrote in a research note.