A recent leading economic indicator, published by Torcuato Di Tella University, put odds of a recession in the Argentine economy at 95% for a second consecutive month.
Over the last 18 years, the indicator has forecasted recessions 4.3 months in advance and growth periods 2.7 months in advance.
South America's second largest economy grew 8.9% in 2011, though inflation probably topped estimates of 24% following several years of hyperinflation.
Economic figures coming out of the Argentine economy are suspect as the government denies estimates for inflation, reporting a rise of just 9% last year. Economists expect growth to fall to just 2.75% this year.
Capital flight pushed the government to institute a series of controls last year as the country is still largely shut out of international bond markets following its 2001 default.Recent tariffs and laws on imports have caused tension with key trading partner Brazil as well.
On Tuesday, Argentina's Supreme Court reapplied a mining ban in certain areas of the Northern provinces. Parts of the ban were struck down by a lower court after the mining industry warned it would set back construction and development of the sector.
Barrick Gold ( ABX , quote ) operates a $5 billion gold and silver mine in the San Juan province and could be affected by the ban.
Also announced on Tuesday was that the Argentine economy would need a $400 million loan from the Development Bank of Latin America, formerly the Andean Development Corporation, to finance infrastructure projects.
The Global X FTSE Argentina 20 ( ARGT , quote ) has followed the overall market down with a loss of 23.5% since the beginning of the year, underperforming most other country and regional funds.
One sector of the Argentine economy is gaining within the weak environment. Argentina is experiencing a real estate boom as people line up to buy hard assets to protect the value of their wealth.
The market for home loans is still fairly undeveloped as mortgages represent only 11% of Argentine banks' total lending compared to 67% in Chile.
The government has launched an ambitious mortgage program aimed at increasing credit growth. The national pension agency is set to lend $4.4 billion dollars for mortgage loans through 2013.
Ternium ( TX , quote ) should benefit from the increase in mortgage growth and home construction.
The $4 billion manufacturer processes steel products for construction, home appliances and capital goods.
Shares have gained 5.9% since the beginning of the year and pay a 3.8% dividend yield, easily outperforming the broader market.
The government has yet to propose a plan to address, or even acknowledge, its serious fiscal and economic problems. The Argentine economy remains a high risk for investors and should generally be avoided.
Speculators may take short-term positions in individual names but should book profits regularly.
nasdaq.com
Over the last 18 years, the indicator has forecasted recessions 4.3 months in advance and growth periods 2.7 months in advance.
South America's second largest economy grew 8.9% in 2011, though inflation probably topped estimates of 24% following several years of hyperinflation.
Economic figures coming out of the Argentine economy are suspect as the government denies estimates for inflation, reporting a rise of just 9% last year. Economists expect growth to fall to just 2.75% this year.
Capital flight pushed the government to institute a series of controls last year as the country is still largely shut out of international bond markets following its 2001 default.Recent tariffs and laws on imports have caused tension with key trading partner Brazil as well.
On Tuesday, Argentina's Supreme Court reapplied a mining ban in certain areas of the Northern provinces. Parts of the ban were struck down by a lower court after the mining industry warned it would set back construction and development of the sector.
Barrick Gold ( ABX , quote ) operates a $5 billion gold and silver mine in the San Juan province and could be affected by the ban.
Also announced on Tuesday was that the Argentine economy would need a $400 million loan from the Development Bank of Latin America, formerly the Andean Development Corporation, to finance infrastructure projects.
The Global X FTSE Argentina 20 ( ARGT , quote ) has followed the overall market down with a loss of 23.5% since the beginning of the year, underperforming most other country and regional funds.
One sector of the Argentine economy is gaining within the weak environment. Argentina is experiencing a real estate boom as people line up to buy hard assets to protect the value of their wealth.
The market for home loans is still fairly undeveloped as mortgages represent only 11% of Argentine banks' total lending compared to 67% in Chile.
The government has launched an ambitious mortgage program aimed at increasing credit growth. The national pension agency is set to lend $4.4 billion dollars for mortgage loans through 2013.
Ternium ( TX , quote ) should benefit from the increase in mortgage growth and home construction.
The $4 billion manufacturer processes steel products for construction, home appliances and capital goods.
Shares have gained 5.9% since the beginning of the year and pay a 3.8% dividend yield, easily outperforming the broader market.
The government has yet to propose a plan to address, or even acknowledge, its serious fiscal and economic problems. The Argentine economy remains a high risk for investors and should generally be avoided.
Speculators may take short-term positions in individual names but should book profits regularly.
nasdaq.com
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