BUENOS AIRES: Argentina's economic activity is seen picking up slightly in October from September's virtual stagnation to grow 0.5 percent year-on-year, boosted by increased factory output, a Reuters poll showed.
A boom in Latin America's No. 3 economy has sputtered out this year due to sluggish global demand, high inflation, a drought-hit 2011/12 grains harvest and the impact of government import and currency controls on investment.
Seven analysts contacted by Reuters gave widely varying estimates for October activity, from a 2.4 percent decline to growth of 3.0 percent from a year earlier. The median view was for growth of 0.5 percent and the average was 0.4 percent.
"Activity continues to bump around the bottom as the authorities remain reluctant to make significant structural economic adjustments -- fiscal, monetary and currency -- that would restore confidence and growth," investment bank Morgan Stanley said in a report, forecasting growth of just 0.1 percent in October.
In September, the EMAE economic activity index showed growth cooled to 0.1 percent year-on-year, defying forecasts for a sharp rebound in the second half of 2012.
Factory production, a motor of the Argentine economy, picked up in October, however. It rose 2.2 percent from a year ago in its first gain in seven months.
EMAE is a close proxy for gross domestic product (GDP), which is reported quarterly in Argentina.
GDP rebounded slightly in the third quarter after showing zero growth in the previous period, but the weak data will further dishearten creditors holding the country's growth-linked GDP warrants.
Argentina's government lowered its forecast for growth this year to 3.4 percent, according to its 2013 budget bill.
But many analysts think the government will purposely report 2012 growth below the 3.26 percent threshold that would trigger several billion dollars worth of payments on growth-linked GDP warrants next year.
The central bank lowered its forecast for 2012 growth to about 2 percent last week, estimating an expansion of 4.6 percent in 2013.
Argentina's economy expanded 9.1 percent in October 2011 versus the same month a year earlier.
Center>Copyright Reuters, 2012
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