WRAPUP 1-Argentina economic data a mixed bag in early 2013

Fri Mar 22, 2013 3:51pm EDT

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* January economic activity beats expectations

* February industrial production sinks 4.4 pct

* Boom over in Latin America's third-biggest economy

By Hilary Burke

BUENOS AIRES, March 22 (Reuters) - Argentina's economic performance was patchy in the first two months of 2013 after January economic activity beat expectations and February industrial production fell sharply, government data showed on Friday.

A long boom in Latin America's No. 3 economy ran out of steam last year due to sluggish global demand, high inflation, a weak 2011/12 grains harvest and the impact of government import and currency controls on investment.

Growth in gross domestic product shrank to 1.9 percent in 2012 versus 8.9 percent a year earlier.

But in January, economic activity accelerated to 3.2 percent year-on-year, beating the 1.7 percent median forecast in a Reuters poll. President Cristina Fernandez announced the figure a day ahead of time to underscore the economy's resilience.

Argentina's economy grew 0.4 percent in January versus December, according to the EMAE economic activity index, which is a close proxy for GDP. This compared with an 0.2 percent increase in December versus November.

But economic consultant Federico Thomsen said it was too early to know what 2013 would bring.

"January economic data, heavily influenced by the (southern hemisphere) summer holidays, are never representative of the year ahead," Thomsen wrote in a recent report.

In February, industrial production took an unexpected dive.

Factory output last month fell 4.4 percent versus a year earlier, coming in far below the median forecast in a Reuters poll for 0.8 percent growth.

Output, which showed the biggest decline since September 2012, was dragged down by a nearly 25 percent drop in steel and aluminum production.

Industrial production also fell 1.5 percent in February compared with January, seasonally adjusted, the INDEC statistics institute said.

In January, industrial production had inched higher by 0.2 percent year-on-year and risen 0.6 percent versus December.

Factory output fell 1.2 percent in 2012, marking the first decline since a wrenching economic crisis a decade earlier.

Also on Friday, the government reported that the country's current account deficit narrowed slightly in the fourth quarter to $1.02 billion from a revised $1.08 billion during the same period of 2011.

In 2012 as a whole, the current account balance of payments ran a surplus of $479 million compared with a revised deficit of $1.57 billion in 2011.

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