Brasil and Argentina represent more than 85% of the Mercosur free trade zone area.
The INDEC (Instituto Nacional de Estatística e Censo) announced recently, that the Argentinian GDP increased 9,2% in 2010. This is a major improvement after the financial crisis in 2009 (0,9%). The production of goods increased 10,6% in particular through activities in the agricultural sectors. The service sector even showed an spectacular growth of 76% in 2010.
This positive development is due to an interesting growth of industrial production (automotive & suppliers) to 9.7%. Since 2003 Argentina showed an remarkable yearly growth of about 9%, interrupted in 2008 (7,1%) and 2009.
To the contrary, Brazilian authorities try to control market overheating, as already noted in the last blog post. Economists from the ITAU revised now their GDP analysis from 4.0% to 3,6% for 2011 and a forecast to 3,8% for 2012, which underlines the success of this activities.
It is expected that the base lending rate (taxa selic) will be reduced from 75 to 50 base points. The economists expect further an global economic increase from 4,2% to 4,4% in 2011.