(Adds details from Indec report, Brazil recession)
BUENOS AIRES Nov 30 Argentina's industrial
production contracted 8.0 percent in October from the
same month a year earlier, national statistics agency Indec said
on Wednesday, marking the sharpest monthly drop in activity so
far this year.
That was more than the median expectation of a 6.5 percent
year-on-year decline in a Reuters poll and the ninth straight
month of shrinking output, the latest in a string of indicators
showing that the recession in Latin America's No. 3 economy is
lasting longer than the government initially forecast.
President Mauricio Macri has enacted a number of
business-friendly reforms to attract investment and stimulate
the inflation-plagued economy, but a promised rebound in the
second half of 2016 has not yet materialized.
Cumulatively, Argentina's industrial output for the first 10
months of 2016 has fallen 4.9 percent compared with the same
period last year. The drop in October was primarily driven by a
26.7 percent decline in the textile industry and a 19.1 percent
drop in the automotive industry.
A prolonged recession in neighboring Brazil, Argentina's
largest trading partner accounting for more than 15 percent of
total exports, continues to weigh on the economy. Brazil said on
Wednesday that its economy shrank 0.8 percent in the third
quarter from the second quarter and 2.9 percent year-over-year.
Economists have cut 2017 growth forecasts for Brazil to
around 1 percent amid disappointing economic performance since
President Michel Temer took office in May, and some analysts do
not rule out a third year of recession in what would be the
country's worst downturn ever.
Brazil accounts for nearly three-quarters of all Argentine
automobile exports, and sales in units have fallen 33 percent in
the first ten months of this year compared with the same period
last year, Indec said on Wednesday.
Argentina's economy is expected to drop between 1.5 and 2
percent this year, before rebounding to grow between 3 and 5
percent in 2017. Last week, government data showed economic
activity shrank 3.7 percent in September versus a year earlier.
(Reporting by Luc Cohen; Editing by James Dalgleish, Alistair
Bell and Bill Rigby)