Cigarette Production Up As Economy Tanks

Argentina’s economy is showing signs of a severe contraction. Many economists say that, despite official data, the economy entered into a recession in the fourth quarter of 2008. Evidence of a contraction – such as declining demand for energy and tanking demand for industrial goods – abounds.

The production and sale of automobiles has plummeted in recent months, with production falling almost 60% in the first two months of 2009 amid a slowdown in demand. Even the production of food and drinks, which is typically fairly stable even during crises, declined 2.5%.

But one product seems to be avoiding the downturn: cigarettes.

According to a report published Tuesday by the economic think tank FIEL, cigarette production rose 1.7% in January and February, making it the only category to rise.

What could possibly explain the carcinogen’s contrarian behavior? Could it be that heightened economic and political uncertainty is making people nervous and that they’re turning to smoking to relax?

The FIEL economist in charge of the report wasn’t immediately available to comment but if he gets back to me with an answer, I’ll update the post accordingly.

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