(Adds economic and political context, includes current account data)
BUENOS AIRES, March 21 (Reuters) - Argentina's industrial production contracted 0.5 percent in February from the same month last year, the government said on Friday, marking the seventh consecutive monthly loss in factory output due in part to weakness in the auto-making sector.
Six analysts polled by Reuters this week forecast a 2.0 percent drop during the month, according to the median forecast.
Industry in the South American country has been hit by one of the world's highest inflation rates, estimated by private economists at over 30 percent per year, as well as heavy-handed currency controls meant to support the country's wobbly peso.
Factory output rose 0.2 percent in February as measured against January, according to a statement from the INDEC national statistics institute. The year-on-year figure was seasonally adjusted while the February versus January figure non-seasonally adjusted.
Also on Friday, Argentina reported a current account deficit of $1.721 billion in the fourth quarter and ended the year with a deficit of $4.330 billion.
The current account is the broadest measure of a country's foreign transactions, encompassing trade, services and an array of financial flows, including interest payments.
Argentina's peso currency has weakened 36 percent over the last 12 months to 7.975 per U.S. dollar as investors clamor for President Cristina Fernandez to tighten fiscal policy in a bid to control inflation and slow the outflow of central bank reserves, down 33.7 percent over the last year to $27 billion.
Wall Street is guardedly optimistic that Argentina's economic policies will turn in a more market-friendly direction after next year's presidential election. Now in the second half of her second term, Fernandez cannot run again in 2015. (Reporting by Hugh Bronstein and Anthony Esposito; Editing by Marguerita Choy)