Argentine Economy Probably Slowed in June on Energy Shortage

Argentina’s economy, the second- largest in South America after Brazil, probably slowed in June as cold weather and a lack of investment in the energy industry led to rolling blackouts and electricity cuts for companies.

Annual economic growth probably slowed to 7.6 percent in June compared with 8.5 percent in May and 8.6 percent in the same month last year, according to the median estimate in a Bloomberg survey of 12 economists. The national statistics institute will release the figures at 3 p.m. New York time.
“The energy crisis was a big factor in lowering industrial production in June,” said Juan Pablo Fuentes, a Latin America economist at Moody’s Economy.com in West Chester, Pennsylvania.

More than four years of economic growth of over 8 percent under President Nestor Kirchner has strained energy supplies, raised demands for higher wages and helped fuel inflation. The government announced yesterday that it was increasing pension payments 12.5 percent beginning in September to help retirees.

“The government and the central bank are willing to see a moderation in economic growth that will take pressure off prices,” Fuentes said. Consumer prices rose 0.5 percent in June from the previous month, the government reported Aug. 6.

Annual growth in industrial production fell to 5 percent in June compared with 9.9 percent a year earlier as the government began rationing electricity to about 4,000 companies at the start of the Southern Hemisphere winter.

Bloomberg