Argentina

Bolivia
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Geography
Area Capital 2,766,890km2 Buenos Aires 4

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Demography
Population Density Urbanisation Ofcial language 39.0m 14 inhab./km2 89% Spanish
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5 Buenos Aires

GNI per capita US$4470 Currency Argentine peso (ARS) Per capita cement consumption 191kg

The Argentine economy is witnessing strong recovery, although there are some doubts over how long this will last. Cement consumption has recovered to levels last seen in the late 1990s, and is set for further growth. The industry is responding with increased investment into production facilities.

At

ive years after Argentinas economic meltdown, triggering riots, devaluation and debt default, the economy is now enjoying a remarkable revival. The economy grew at 9.2 and eight per cent in 2005 and 2006 respectively. The agribusiness, construction and export sectors have been particularly dynamic. Ination, however, remains stubborn, although the 12-month ination rate is reported to have edged down to 9.7 per cent YoY in January 2006. The alleged manipulation of ination gures by the government has undermined condence in these statistics. The government has frozen utility tariffs in an effort to curb ination, and negotiated price agreements for over 70 per cent of items in the consumer basket. The peso is pegged three to the dollar to boost tourism, exports and construction. Yearly ination is expected to climb slightly to around 10 per cent in 2007 and 2008, even assuming a tightening of monetary and scal policies. There

is a long-term risk that ination-control measures could discourage investment, as has already happened in the energy sector, resulting in future shortages. GDP growth is expected to remain robust in 2007, albeit slowing to seven per cent from eight per cent in 2006, as growth of industry is set to ease. GDP growth in 2008 is expected to stabilise at 4.5 per cent. The Argentine construction sector has been among the main factors for the good performance of the national economy over 2006, driven by public infrastructure and housing projects. The building sector contributes around ve per cent of GDP and this is increasing. Construction activity expanded by 15.2 per cent YoY in 2006. According to INDEC, the countrys statistics institute, construction costs marked a 19.8 per cent YoY rise in January 2007, including a 26.6 per cent increase in workers remuneration, a 15.3 per cent rise in the prices of building materials and a 13 per cent rise in general costs.

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THE GLOBAL CEMENT REPORT

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The construction outlook for the sector in 2007 is mainly positive, ensuring that the core drivers of cement demand remain. US$350m out of a total US$1.5bn credit line approved by the Inter-American Development Bank (IDB) has already been allocated to specic projects covering basic utilities and road infrastructure, supplemented with US$40m funding by the state. A US$195m road infrastructure investment programme is underway in southern Argentinas Santa Cruz province. Other large-scale projects include the construction of a high-speed train connecting the capital Buenos Aires to Mar del Plata over a distance of 400km.

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Economy

Consumption
Cement demand has reached an alltime high in Argentina as the country continues its rapid recovery from the crisis of 2002 when consumption plummeted to the lowest point in a decade. The market was buoyant in 2006 as YoY growth of 19.3 per cent lifted domestic consumption to 8.86Mt, an increase of 1.45Mt on 2005. Per capita consumption stands in 2006 at 227kg, a dramatic turnaround from the low of 103kg recorded in 2002. Consumption is particularly strong in the provinces of Chubut, Santa Cruz, San Luis and Neuquen, where per capita consump-

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