Saturday, September 22, 2012

Cry for yourselves, Argentina

But there will be growth in the spring;
Argentine President Cristina Fernandez de Kirchner’s efforts to stem capital outflows and extend her control over South America’s second-largest economy has brought growth to a standstill.
....“The government’s policies have halted growth because they led to lack of confidence and of investments,” said Walter Molano, head of sovereign research for emerging markets at BCP Securities in Greenwich, Connecticut, an investment bank that focuses on developing nations. “Argentina could have easily continued growing 7 percent or 8 percent for years.”
Since her re-election in October, Fernandez, 59, has banned most purchases of foreign currency, restricted imports and nationalized YPF SA (YPF), the country’s biggest oil producer. While those policies have eroded business confidence and investment, a drought in the U.S. that has pushed up soybean prices may provide some relief for the world’s third-largest producer of the oilseed.
....The Argentine government has defended its record and says growth will rebound.
“The engines of economic growth next year will be a boost in domestic consumption and in investment,” Economy Minister Hernan Lorenzino told lawmakers when he presented the 2013 budget yesterday. “Argentina’s economy continues growing in an international economic context in which some important regions in the world are in recession.”

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