Argentina slow to join Latin economic recovery

BUENOS AIRES, Nov. 20 (UPI) -- Argentina is slow to join Latin American countries that are already on the road to economic recovery since last year's financial crisis because of worries over the stability of the Buenos Aires leadership, analysts said Friday.

The clearest hint of investor concerns over Argentina's direction comes from Moody's, the ratings agency, which said the Argentine leadership's lack of success with intractable political and economic problems was an issue.

Gabriel Torres, a senior analyst for Moody's, told a news conference in Buenos Aires, "Argentina's inability to solve its political differences is a problem," pointing out that the country's "contentious politics" make it less able to cope with the impact of economic shocks. However, Argentina's economic fundamentals remain good and can lay the groundwork for growth at a later stage, Torres said.

A gloomy outlook for Argentina has featured in several recent economic analyses.

Fitch Ratings also said Argentina's credit ratings are likely to remain in highly speculative territory for some time.

President Cristina Fernandez de Kirchner's continuing problems with political rivals and farmers' unions have been singled out as potent destabilizing factors.

Elsewhere in Latin America, improved economic outlook has put Brazil, Peru and Uruguay on the road to recovery and forecasts for growth in Chile and Mexico have raised optimism the two countries may be out of recession by early 2010.

The Economic Climate Index in Latin America, the result of a partnership between the German Ifo Institute and Brazil's Getulio Vargas Foundation, rose to 5.2 from 4.0 points between July and October 2009, exceeding for the first time since January 2008 the average of the last 10 years -- 5.1 points, MercoPress reported.

The Organization for Economic Cooperation and Development has already identified Brazil, Mexico and Chile as the three countries most likely to be out of recession by the beginning of 2010. OECD said the Brazilian economy would likely grow by 4.5 percent in 2010 and 2011 and Mexico could mark its recovery with a growth between 2.7 percent and 3.9 percent in 2011.

Both Chile and Mexico were hit by last year's economic crisis, mainly because both are integrated into the global economy. Chile, slowly on the mend since early this year, is likely to grow 4.1 percent in 2009. Chilean economy contracted 1.8 percent this year, mainly in a continuing effect of last year's troubles.

Mexico is the only Latin American member of OECD while Brazil, Latin America's largest economy and Chile, are candidates to become full members. OECD brings together 30 of the industrialized countries but does not include China or India.