Weekly Report - 25 May 2004

ARGENTINA | Power crisis starts biting. News that economic activity overall in March was up 11.9% on the same period last year (taking the first-quarter increase to 10.5%) has been dampened by the later announcement that between March and April industrial production fell by 3.9%. Though this still leaves production in the first four months 12.8% higher year-on-year, most analysts have noted that this must reflect the first impact of the electricity shortage affecting Argentina [WR-04-13].
The government has tried to downplay the March figures, saying that the fall mainly reflects the fact that April had fewer working days than March. Former industry secretary Dante Sica, who is cautious about the foreseeable impact of the power crisis, notes that more than half of all industrial sectors are currently operating at 75% of installed capacity, and thinking of cutbacks. Last week the government authorised an increase in gas rates for big consumers, which is bound to affect the industrial sector.

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