TEAM GDA02

A01302588 A01307124 A01307744 Erick Rodrguez Nieto Eduardo Barocio Acosta Fernando Carrillo Alejo

Argentina
Review the following statistical releases and data Read the last news release by the Central Bank of selected country on inflation. In Republic of Argentinas Central Bank Inflation Report for the Third Trimester of 2010 Government states that different Price indexes reflect a moderated Inflation increase in second trimester compared with the previous months of 2010. These, because of less pressure in food and beverages prices at an international and local level and to the low seasonality of the period. Since the fourth month of the year price increase of meat slowed down according to the international markets. So by the second trimester the pressure that had lead to a higher rhythm of price increase in the firsts months of the year disappeared, as well as some seasonality factors that contribute to hold prices evolution as in vegetables, clothing and tourism. Thus, retail prices decelerated its monthly increase vs. the first months of 2010, given mainly by food.

During the second trimester, wholesalers prices also showed a conservative behavior, reflecting mainly lower increases in primary products, according to international prices evolution of agricultural raw materials in international markets. In 2010, Industrial and Manufacturing activities have represented the main reason of certain recovery of Argentinas economy, even when manufacturing prices have presented a constant increase. Wholesalers prices have been recovering according to the international economy. In one hand, for the next months of the year, Argentinas Central Bank anticipates that pressure on food and beverages will be moderate and agricultural products will maintain a similar price level but with some volatility. On the other hand, they expect an increase in services because of seasonality of last trimester in some parts of the sector. Different indexes show that Argentinas economy is recovering, and none the first nor the second trimesters should be extrapolated in order to anticipate annual inflation report. It means that 8 or 9 percent of inflation showed in Argentinas economy in the first half of the year, doesnt mean that it will ends at 16 or 18 percent. Government expects Inflation ends at maybe 15% instead of the 20 or even 30% of inflation expected for the analysts at the beginning of 2010.

 Read the country report of your country published by the Economic Commission for Latin America and the Caribbean. Available at http://www.eclac.org Preliminary Overview of the Economies of Latin America and the Caribbean Following six years of robust growth, the Argentine economy experienced a sharp slowdown in 2009, and the growth rate for the year as a whole is expected to stand at 0.7%.The central banks foreign-currency transactions resulted in a slight variation in international reserves, and the exchange rate against the dollar increased by approximately 10% between the end of 2008 and mid-November 2009. The fall in tax collections, together with the substantial increase in government spending, lowered the national public sector primary surplus, while some provincial governments experienced financing constraints. Both official and private statistics attest to a reduction in the rate of inflation, which had a positive impact on poverty and indigence rates, although discrepancies in the different measurements of price levels and other variables cast doubts as to the extent of the actual improvement in these social indicators. Industrial activity actually picked up, thanks in part to the robust growth of the Brazilian economy. Favorable weather conditions suggested that crop volumes, in particular soya output, would rebound. The national government primary surplus is estimated to have shrunk by 1.5 percentage points to 1.4% of GDP. Reported data on the variations in real GDP show dissimilar trends between the goods-producing sectors and the services sector, In the case of the former, the slide in agricultural output led the downturn. The grain harvest dropped from over 90 million tons to just over 60 million in 2008-2009, the lowest level in the decade. The drop in industrial activity was due mainly to a downturn in the capital goods and consumer durables sectors. Automobile production fell by approximately 20% year-on-year in the first ten months of 2009, although it remained at historically high levels. In October, the consumer price index (CPI) of Greater Buenos Aires was reported to show a 6.5% year-on-year increase, while the general wage index rose by 16% over the 12 months up to September. The demand for labor mirrored the slowdown in economic activity. Data for the third quarter revealed a slight decrease in year-on-year employment figures, with the jobless rate at 9.1%

 Read the last news release on Industrial Production and Gross Fixed Investment published by the statistical agencies of selected country.

Industrial Production
Monthly %variation without seasonal adjustment

Industrial production growth rate: -1.2% (2009 est.) country comparison to the world: 80 Industrial Monthly Estimate (EMI) (Estimador Mensual Industrial) - September 2010. In agreement with data of the Industrial Monthly Estimator (EMI), the industrial activity of September of 2010 shows increases of 10.1% in the seasonality measurement and of 9.7% in terms of without seasonal adjustment with respect to September of 2009. In September of 2010, in relation to last August, the manufacturing production registers increases of 3.2% in the seasonality measurement and of the 1.2% in without seasonal adjustment terms. The industrial activity of the first nine months of 2010 with respect to the same period of the previous year presents/displays growth of 9.5% in without seasonal adjustment terms and 9.4% in the seasonality measurement. The industrial activity of the third quarter of 2010 in relation to the second quarter of 2010 registers an increase of 0.9% in without seasonal adjustment terms. In relation to the behavior of the tendency-cycle index, an increase of 0.3% with respect to the month of past August is observed in September of 2010. Table 1. Data to September 2010
Monthly Information Without seasonal adjustment Seasonally adjusted Nine months 2010 / 2009 9,5 9,4 Sep 2010 / Sep 2009 Percentage variation 9,7 10,1 Sep 2010 / Aug 2010 1,2 3,2

Table 2. Three month (Quarterly) data

Seasonally adjusted 3 Quar 2010 / 3 Quar 2009 2 Quar 2010 / 2 Quar 2009 1 Quar 2010 / 1 Quar 2009 4 Quar 2009 / 4 Quar 2008 3 Quar 2009 / 3 Quar 2008 Percentage variation 9,3 10,1 9,0 5,4 -1,4 Without seasonal adjustment (*) 3 Quar 2010 / 2 Quar 2010 2 Quar 2010 / 1 Quar 2010 1 Quar 2010 / 4 Quar 2009 4 Quar 2009 / 3 Quar 2009 3 Quar 2009 / 2 Quar 2009 Percentage variation 0,9 2,8 -0,4 5,7 1,7

(*) The quarterly data Without seasonal adjustment EMI were obtained from the quarterly average of the Without seasonal adjustment monthly series.

Gross Fixed Investment

Investment (gross fixed): 20.9% of GDP (2009 est.) country comparison to the world: 78 Argentinas investment climate deteriorated in 2009 amid waning market confidence, growing policy uncertainty and escalating state intervention in the economy. An unpredictable policy framework and weak institutions, in addition to macroeconomic instability, have suppressed investor interest. The domestic economy is increasingly subject to trade protectionism and the continuing use of price and foreign-exchange controls, in an attempt to control the distortions arising from expansionary fiscal and monetary policies. Lower international financial flows and a weakened domestic business environment put a damper on inflows of foreign direct investment (FDI) to Argentina in 2009. Gross FDI inflows to Argentina plummeted to US$4bn in 2009, according to the National Statistics and Census Institute (Instituto Nacional de Estadstica y CensosINDEC), from US$9.7bn in 2008, which was the highest amount of FDI inflows recorded since 2000. Inflows of FDI to Argentina in 2009 accounted for 6.9% of the total entering Latin America, according to the United Nations Economic Commission for Latin America and the Caribbean (ECLAC). The countries in the region that received more FDI in 2009 were Brazil (US$25.9bn, 36.6% of total inflows), Chile (US$12.7bn, 17.9%), Mexico (US$11.4bn, 16.1%) and Colombia (US$7.2bn, 10.2%). According to the latest available disaggregated figures from the central bank (Banco Central de la Repblica ArgentinaBCRA), the manufacturing sector attracted investment in 2008 that amounted to US$5.17bn (or 53.3% of total inflows of US$9.7bn); followed by financial services (US$1.14bn, or 11.8%); infrastructure (US$891m, or 9.2%); trade and services (US$819m, or 8.4%); agriculture (US$637m, or 6.6%); and mining (US$544m, or 5.6%). Following the crisis earlier this decade, aggregate investment in Argentina rose sharply, helping to spur the vigorous recovery in economic growth since 2002. The investment environment changed significantly as the economy recovered, notably through significant real exchange rate depreciation, negative real interest rates and increased international demand for argentine products. Financial conditions were affected by sovereign default and banking crisis.

Foreign direct investment, net inflows (BoP, current US$)

2005 Argentina 5,265,250,000 2006 5,537,340,000 2007 6,473,150,000 2008 9,725,553,130 2009 4,009,395,675

Sources:
http://www.bcra.gov.ar http://www.eclac.org/ https://www.cia.gov/library/publications/the-world-factbook/geos/ar.html http://www.indec.gov.ar/ http://portal.eiu.com. http://data.worldbank.org/ http://www.imfstatistics.org (IMF Working Paper - Investment by Large Firms in Argentina)