* December declines 3.4 percent yr/yr, more than expected
* Annual output pulled down by auto, metals industries
By Hilary Burke
BUENOS AIRES, Jan 24 Argentina's industrial
production fell in 2012, the first decline since a wrenching
economic crisis a decade earlier.
Factory output shed 1.2 percent in 2012 due to
shrinking automobile and basic metals output as well as weak
domestic and external demand, the government said on Thursday.
A long boom in Latin America's No. 3 economy ended last year
because of sluggish global conditions, high inflation, a
drought-hit 2011-12 grain harvest, and the impact of government
import and currency controls on investment.
In December, industrial production fell by a
larger-than-expected 3.4 percent from a year earlier.
Nine analysts polled by Reuters had forecast a 0.6 percent
median decline, with estimates ranging from -1.6 percent to +3.1
Factory output dipped 0.6 percent in December compared with
November, seasonally adjusted, the government said.
Last year's poor performance partly stemmed from a downturn
in the auto industry, which depends heavily on exports to
Brazil. But tough import rules also played a role by delaying
the entry of some foreign-made parts, and domestic demand cooled
as overall economic growth slowed.
The government said car-making fell 6.6 percent in 2012
while the production of basic metals, including raw steel and
primary aluminum, shed 8.7 percent.
In December, the decline in industrial production was fueled
by a 14.6 percent drop in basic metals and a 9.5 percent
decrease in construction materials.
The construction industry has been hurt by a virtual ban on
dollar purchases that roiled the real estate market, where most
transactions were made using the U.S. currency.
"The industrial sector is expected to benefit from the
recovery in Brazilian activity forecast in 2013," BNP Paribas
said early on Thursday in a research note.
The bank added that private economists estimated Argentina's
annual industrial output fell by 1.9 percent in 2012 - worse
than the 1.2 percent decline reported officially.
Analysts have long accused of the government of releasing
overly optimistic economic growth and industrial production
figures, while grossly understating inflation. The country faces
possible sanctions by the International Monetary Fund over the
accuracy of its statistics.