Argentina On The Cusp Of A Recession – Di Tella

Argentina, a country whose economy has been growing at the blistering pace of a wild weed since 2003, is almost certainly on the cusp of a recession. That, at least, is what a recent series of data from Torcuarto Di Tella University seem to indicate. The above graphic shows how the survey indicates there is a 99.99% “probability of a recession.”

In a report published Monday that tracks the performance of distinct “leading economic indicators,” the university highlighted data indicating that the economy’s long, happy run has come to an end. Di Tella’s survey is somewhat similar conceptually to a widely watched U.S. report published by the Conference Board. I won’t bore you with more details of the survey, but you can see it for yourself here.

Di Tella’s index seems to support the more pessimistic (more realistic?) forecasts of economists who think Argentina either has already entered into a recession or is about to do so. The government has forecast economic growth totaling 4% this year, but no private sector economist thinks that’s probable. One economist even expects the economy to shrink as much as 3% (less realistic?).

In a speech late Tuesday, former Argentine President Nestor Kirchner, who is clearly concerned about the global economic crisis and its impact on Argentina and the government of his wife and successor, Cristina Fernandez, called on companies here not to “eliminate a single job.” He said they should sacrifice profit before sacrificing jobs.

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