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Monday, June 18, 2012

Argentine Economy Grew 5.2% in First Quarter From Year Ago

Argentina’s economy expanded at the slowest pace since 2009 in the first quarter, hampered by a slowdown in Brazil and drought-hit harvests.


South America’s second-biggest economy grew 5.2 percent from the year earlier, the National Statistics Institute said in Buenos Aires today.

Expansion exceeded the 4.8 percent median estimate of eight economists surveyed by Bloomberg. The economy grew 0.9 percent from the fourth quarter of 2011.

A shortage of rain that affected soybesoybean and corn crops,an and corn crops, reduced demand in neighboring Brazil, Argentina’s main trade partner, and restrictions on imports that led to a shortage of parts for manufacturers, contributed to the slowdown.

The country, which expanded an average of 7.7 percent a year from 2003 to 2011, will expand 3.5 percent this year, according to a June 14 report by the United Nations. That would be the weakest growth since 2009, when the economy expanded 0.9 percent.

Vehicle production fell 24 percent in May from a year earlier as exports plunged 46 percent, the Argentine Automakers Association said June 5. About 80 percent of auto exports are sold to Brazil.

The slowdown in demand from Brazil prompted Renault (RNO) Argentina SA, the country’s third-biggest car producer, to cut shifts this month.

The Buenos Aires Cereals Exchange last month forecast that the drought will reduce this year’s soybean harvest to 39.9 million tons from the previous season’s 49.2 million tons, while corn output will drop 16.5 percent to 19.3 million tons.

bloomberg.com

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