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UPDATE: Argentina Says May Industrial Prod -1.7% On Year
Wall Street Journal
June 24, 2009

By Matthew Cowley Of DOW JONES NEWSWIRES

BUENOS AIRES (Dow Jones)--Argentina's national statistics agency Indec said Wednesday that industrial production fell 1.7% in May from its year earlier level, and was down 0.2% on the month.

The annualized figure represents a deterioration from the 1.4% on-year contraction posted in April, and was also well below the minus-1% consensus on-year forecast contained in the Central Bank's monthly survey of economists.

As with other indicators in Argentina, the forecasts that economists submit to the central bank survey reflect their expectations for Indec's report but not necessarily their estimations of actual economic performance. Indec's numbers are widely discredited amid allegations of government interference.

Many of the estimations on the real state of the economy present a far more alarming picture than is contained in official data. Orlando J Ferreres & Asociados, or OJF, said last week that it estimates May output fell 8.6% on the year.

Meanwhile, the Foundation for Latin American Economic Research, or FIEL, said late Wednesday that May industrial output tanked 12.2% on the year. FIEL said output was unchanged from April. Both figures are seasonally adjusted.

Various reports have independently estimated that Argentina entered into a severe recession in the first quarter, even though Indec data as recent as Thursday's March economic activity report suggest it continues to be growing.

Also Wednesday, Indec reported that industry was running at 71.6% of full capacity in May, down from 74.9% a year ago and 74.7% in April.

(Taos Turner contributed to this report.)

-By Matthew Cowley, Dow Jones Newswires; 54-11-4103 6740; matthew.cowley@dowjones.com

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