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back to index backLATINtalk June,  2004


Argentina: Political unrest in Brazil threatens economic recovery

Argentina Economic Outlook.

The economic recovery seems to be underway, although it remains shaky, as the economy is still struggling to shrug off the significant economic distortions inherited from the previous administration. Economic activity returned to growth in March after February’s contraction, mainly thanks to expansions in the construction, financial and agricultural sectors, and construction activity continued to grow healthily in April. Nevertheless, consumers grew slightly more pessimistic in May due to a worsening perception of the macroeconomic situation, with inflation remaining stubbornly high and the economy taking longer than expected to pick itself up. The weakness in the external sector observed in Q1 persisted at the start of the second quarter, with export growth decelerating and imports jumping in April, likely due to the effects of a strong peso. However, the appreciation of the currency came to an abrupt halt in May after the foreign exchange market was shaken by surging political instability in Brazil, causing the Central Bank to stop U.S. dollar purchases.

To see statistics, please click here.

Source: FocusEconomics
- GAI





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