Argentine Factory Output Tumbles as Brazil Buys Fewer Cars
Argentina’s industrial production fell more than 4 percent for a second straight month in June, the biggest two-month drop in a decade, as slowing growth in Brazil undermines automobile exports and steel production.
Output fell 4.7 percent last month from a year earlier and 0.1 percent from May, the national statistics institute said today in Buenos Aires. The annual decline was steeper than forecast by eight economists surveyed by Bloomberg, whose median estimate was for a 4.5 percent fall. Auto production, which led industrial growth in recent years, dropped 34 percent in June, mainly because of lower demand from neighboring Brazil.
South America’s second-biggest economy, which defaulted on $95 billion in late 2001, will expand 2.45 percent this year, the least since 2009, according to the median estimate of six economists surveyed by Bloomberg. Economic activity fell 0.5 percent in May from a year earlier, the first year-over-year decline since July 2009, the agency said.
Brazil’s economy is recovering more slowly than expected from a contraction in last year’s third quarter. Gross domestic product expanded at a 0.8 percent annualized rate in the first quarter, and economists in the latest central bank survey lowered their 2012 growth estimate for the 10th straight week, to 1.9 percent.
Argentine President Cristina Fernandez de Kirchner tightened import restrictions this year in a bid to help local manufacturers. The measure led to shortages of machinery and supplies that are imported, said Orlando Ferreres, a former deputy economy minister who now runs Buenos Aires-based Orlando Ferreres & Asociados.
“The lack of supplies has forced some companies to cut output,” Ferreres said. His independent index of industrial output showed a decline of 6.9 percent in June, led by automakers and the agrochemicals industry.
Steelmaker ArcelorMittal (MT)’s Argentine unit will reduce production because of a drop in demand from neighboring Brazil, newspaper El Cronista said today. Acindar Industria Argentina de Aceros SA, the nation’s second-largest steel producer, will cut a shift at its plant in Santa Fe province for five months, the Buenos Aires-based newspaper said, citing Leandro Del Grecco, a union leader.
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