Domestic Demand On The Slide

Although Argentina's economic activity index continues to show expansion, data on industrial production, retail sales, construction output, and imports suggest that the economy is slipping into recession. While Q109 real GDP data will give a clearer picture, we note that the risks to our forecast of a 1.0% real GDP contraction this year appear weighted to the downside. We maintain our view that the economy will contract by a further 0.9% in 2010.

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