BUENOS AIRES, March 15 Argentina's gross
domestic product expanded 2.1 percent in the fourth
quarter from a year earlier, the government said on Friday,
bringing full-year 2012 growth in Latin America's No. 3 economy
to 1.9 percent, as expected.
The expansion in the last three months of last year was
driven by 4.2 percent year-on-year growth in the services
sector, which outweighed a 1.9 percent contraction in
manufacturing, it said.
The fourth quarter expansion came in at 1.3 percent versus
the third quarter. But private economists and the International
Monetary Fund (IMF) have long suspected the government of
manipulating its official statistics.
The full year GDP growth figure, a substantial slowdown from
the 8.9 percent expansion clocked by Argentina in 2011, was
expected by analysts and creditors holding growth-linked GDP
warrants issued during the country's 2005 and 2010 debt
The warrants pay out only when growth tops a certain
threshold. If 2012 growth had exceeded 3.26 percent, Argentina
would have been obliged to pay roughly $4 billion on the
warrants in December of this year.
Private consumption in the country rose 4.5 percent year on
year in the fourth quarter of 2012 versus a 2.1 rise in the
third quarter, the government's INDEC statistics institute said.
Moody's Investors Service on Friday cut the credit rating on
Argentine sovereign debt governed by foreign law to Caa1, citing
increased risk of a default due to a U.S. legal case involving
investors who declined to participate in the country's 2005 and
2010 restructuring of defaulted obligations.
Argentina's international bonds underperformed the rest of
the market on Friday, widening by 8 basis points while the
JPMorgan Emerging Markets Bond Index Plus widened only 2
basis points. Wider spreads reflect higher perceived risk.
The country is widely accused of manipulating inflation data
and, to a lesser extent, growth data. It faces potential
sanctions by the IMF, which last month issued a "declaration of
censure" against Argentina over the quality of its inflation and