Argentina was in a recession for two years, and its recent signs of recovery are tepid at best. Real gross domestic product in the third quarter was flat compared with a year ago, and the fourth-quarter data look weak. Industrial production, which had begun to rise at midyear, turned south in the second half. The two bright spots in the economy's performance have been a narrowing of the trade deficit and the absence of inflation, both expected outcomes of a recession. With domestic demand weak, imports are shrinking.
Officials are now more optimistic about the economy and financial markets.
Argentina already received extensive help from the International Monetary Fund in 2000, but now the hope is that foreign investors, looking for higher payoffs than those found in the U.S., may park more of their money in the emerging markets, including Argentina. The McGraw-Hill Companies Inc. All rights reserved.