Argentina's textiles and apparel industry expects to grow strongly in 2007, helped by strong consumer spending on the back of an economic bonanza and export rises, Hector Kolodny, president of top trade lobby Camara Industrial Argentina de la Indumentaria (CIAI) has told just-style.

He said the industry grew 12%-15% in 2006 when exports increased 8%.

Argentina's economy grew over 8% last year, raising disposable incomes in the country (which has recovered from a deep recession in 2002). This year, the economy is seen growing at a slower 5.5%, but rising tourism rates also helped bolster apparel sales, Kolodny explained.

Kolodny would not provide growth forecasts for 2007 but industry observers said last year's growth pace could be replicated in 2007. However, they cautioned that the industry must work to tackle rising energy prices, which are hindering competitiveness, and stop soaring Chinese imports.
Argentine electricity and gas prices are rising sharply as the generation infrastructure is too small to meet booming consumption. The government of newly elected President Cristina Fernandez is considering unfreezing electricity prices (to spur investment from
utilities) to fix the problem, which is eating into the sector's competitiveness.

Kolodny said Chinese apparel imports continue to flood the country. In the first eight months of 2007, they soared 298%, he said, adding that sweater, coats and pants come in at large volumes.

The industry continues to urge the government to tackle the issue but it has so far done little to do so, observers said.

The CIAI has also urging Buenos Aires to help shore up the fakes trade, which continues to hurt the industry, and work to regulate any factories that employ illegal workers in inhumane working conditions.

By Ivan Castano.