Argentine Factory Output Contracts for First Time Since 2002

Argentina’s industrial production last year contracted for the first time since 2002, reflecting slowing exports and manufacturing bottlenecks caused by import restrictions on supplies.

Factory output shrank 1.2 percent from 2011, the first contraction since a 10.6 percent decline in 2002 after the country defaulted on $95 billion of bonds and abandoned a decade-old currency peg that fixed the peso at par with the dollar.

In December, output fell 3.4 percent from a year earlier and 0.6 percent from November, the national statistics agency reported today. The year-on-year contraction compares with the median estimate of a 0.2 percent drop by eight economists surveyed by Bloomberg.

South America’s second-biggest economy probably expanded as much as 2 percent last year, the smallest growth since 2009, according to Alberto Bernal, the head of fixed-income research at Bulltick Capital Markets in Miami.

The country’s trade surplus widened in 2012 to $12.7 billion from $10 billion the previous year. Exports fell 3 percent after drought cut corn and soybean crops, while demand from Brazil, the country’s biggest trade partner, waned. Imports dropped 7 percent, the institute reported yesterday.

“Growth will accelerate to about 4 percent this year because a bigger harvest will boost exports and Brazilian industry will improve, helping Argentina,” Bernal said in a telephone interview today.

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