Weekly Report - 27 July 2004

ARGENTINA | Growth outlook. Most uncharacteristically, the central bank predicted last week that Argentina's growth rate this year could reach 8%. This is higher that what the executive and most private economists are forecasting, and the bank has gone as far as to say that, with some favourable conditions, the growth rate could even move into two digits. The bank says that much of the annual increase will be inertia: even if the country stopped growing right now, annual GDP would be 6.7% greater than last year. As it is, the bank is expecting industrial activity (now slowly picking itself up from the April downturn caused by the power crisis) to seize up in the second half of the year because there has not been enough investment to expand installed capacity, now being used at 70%.

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