March 15 (Bloomberg) -- Argentina’s economy last year expanded at the slowest pace since 2009 as drought hit grains and oilseeds harvests and factories trimmed output.
South America’s second-biggest economy grew 1.9 percent in 2012 after expanding 2.1 percent in the fourth quarter from a year earlier, the national statistics agency reported today in Buenos Aires. In 2009, the economy expanded 0.9 percent. Growth averaged 7.8 percent from 2003 to 2011.
“We have grown at very high rates and that doesn’t seem to be sustainable,” said Roberto Drimer, an economist at Vatnet research company in Buenos Aires. “The slower growth was a result of a mediocre harvest and a lower rate of investment.”
President Cristina Fernandez de Kirchner will seek to revive growth ahead of mid-term congressional elections in October, Drimer said. Industrial output fell 1.2 percent last year, after expanding 6.5 percent in 2011, led by a 7.8 percent drop in automobile production.
Fernandez is forcing banks to boost lending for investments that increase production, while the state-run social security agency is financing loans for home construction to spur growth and employment.
Last year’s expansion was below the threshold required to trigger a payment on government securities linked to economic expansion. The GDP warrant was unchanged at 5.53 cents as of 4:14 p.m. local time.
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