Argentina may see economic deceleration in Q2 2012

Argentina's deputy economy minister Wednesday said the country's economic activity might decelerate in the second quarter of next year. Argentina will not see any recession, but there may be a deceleration in the second quarter of 2012, Roberto Feletti said during a meeting of the country's congress commission. He said the government forecasted a 5.1-percent growth next year, which was more moderate than what was expected over 8 percent of this year. The official also defended President Cristina Fernandez's deficit-cutting plan, which as economic analysts said would make the South American country more vulnerable to slide into recession. They believed that Argentina could see a high growth rate this year only at the expense of running a major public deficit. Feletti also hoped the currency rate to remain stable. "We are not seeking competitiveness based on abrupt leaps of foreign exchanges," he said. "Both of the United States and the Eurozone have high unemployment rates due to the lack of recovery of the effective domestic demand," Feletti added. He said the country's economy was mainly related to the world's least affected blocs, as 35 percent of its exports went to the Union of South American Nations. Floods will damage 3.07 million tons of unmilled rice and that the output from the main harvest will fall to 22.3 million tons, compared with a previous projection of 25.8 million tons, according to the estimation of Agriculture Ministry. And the Federation of Thai Industries says more than 100 factories producing auto parts, food and electronic goods have temporarily closed.