UPDATE 2-Argentina says economic growth slowed to 0.5 pct in 2014

viernes 20 de marzo de 2015 17:31 GYT

(Adds details on current account deficit)

BUENOS AIRES, March 20 (Reuters) - Argentina said on Friday that economic growth slowed to 0.5 percent in 2014, but private analysts said the real picture was even gloomier and Latin America's third-largest economy most likely contracted as consumer spending and exports fell.

The country is struggling with low foreign reserves and one of the world's highest inflation rates. Interventionist policies such as trade and currency controls have further put a brake on business as has recession in top trading partner, Brazil.

While those state controls on the economy helped maintain a trade surplus last year, Argentina's overall current account deficit widened 7.9 percent due to the volume of debt payment, profit and dividend outflows, data showed.

President Cristina Fernandez's government is widely suspected of manipulating official data.

"Growing macro imbalances and a weak investment environment are keeping the economy trapped in a bad equilibrium of very weak growth, high inflation, and an increasingly over-valued currency," said Alberto Ramos, head of Latin America economic research at Goldman Sachs.

Argentina's economy grew strongly in the early years of Fernandez's presidency thanks to heavy government spending and high commodity prices. But growth has faltered over the past few years, as inflation sped up, battering consumer spending, and the state ramped up interventionist policies.

Growth was 2.9 percent in 2013 according to official data.

With presidential elections set for October, economists anticipate the next government will inherit a weak economy beset with imbalances. Fernandez is constitutionally barred from another consecutive term.   Continuación...