BUENOS AIRES (Reuters) - Argentinas gross domestic product shrank 0.8 percent in the third quarter from the same period a year earlier, official data showed on Monday, as high inflation and heavy currency controls put Latin Americas No. 3 economy back into negative territory.

On a quarter-on-quarter basis, gross domestic product shrank 0.5 percent compared with a slightly revised expansion of 0.8 percent in the second quarter. The governments Indec statistics agency had originally said the economy grew 0.9 percent between April to June on a quarter-on-quarter on basis. [IDnL2N0RP2MJ]

The economy contracted in the fourth quarter of last year and in the first three months of this year before Indec reported a 0.9 percent expansion in the second quarter, a result that private analysts said understated the countrys financial ills.

Also on Monday Indec said industrial output shrank a more-than-expected 2.1 percent in November versus November 2013, marking the 16th consecutive monthly decline. The median forecast in a Reuters poll of analysts had been for a 1.7 percent drop last month.

Industrial output fell 1.1 percent in November from the previous month in seasonally adjusted terms, Indec said.

Argentina relies on central bank reserves for financing. With foreign investment hobbled by the countrys sketchy credit history, punctuated by defaults in 2002 and 2014, the government uses currency controls to keep US dollars in the country.

Manufacturers that import materials needed for production complain they cannot get their hands on the greenbacks needed to buy parts and machinery from other countries.

The falling international price of soy, Argentinas main agricultural export, has added to the pressure this year while inflation rages somewhere between the governments estimate of 24 percent and private estimates that go as high as 40 percent.

Indec said Argentina had a current account deficit of $736 million in the third quarter after posting a $609 million surplus in the second quarter.

The current account is the broadest measure of a countrys foreign transactions, encompassing trade, services and an array of financial flows, including interest payments.

(Writing by Hugh Bronstein; Reporting by Eliana Raszewski; Editing by Richard Lough and Meredith Mazzilli)

SHANGHAI (Reuters) - Growth in Chinas gross domestic product (GDP) is expected to slow to 7 percent next year from a forecast 7.3 percent this year, partly due to weakness in global economies, a top Chinese government think-tank said in a report published on Monday.

The growth of the world economy may recover slightly in 2015, but it will be difficult to see it fully recovering from weakness seen since the global financial crisis, the State Information Centre said.

As such, our countrys economic growth will show a trend of gradual slowdown, and is forecast to grow around 7 percent in 2015, it said in the report published in the official China Securities Journal.

Chinas consumer price index (CPI) is expected to increase less than 2 percent in 2015, compared with a forecast of more than 2 percent this year, the think-tank said.

Growth of exports is expected to improve slightly to 7 percent from a forecast 6 percent this year, it said.

(Reporting by Lu Jianxin and Pete Sweeney; Editing by Richard Borsuk)

The US economy veered unpredictably in 2014. A polar vortex hampered activity early in the year, but a free fall in gas prices has done the opposite to close it out. With gas prices nearing $2 per gallon in multiple states, consumers are spending less at the pump, giving them more wiggle room to spend in other areas. In general, the US economy is ending the year on a high note: the job market is humming along, the stock market continues to hit new highs, and formerly dull spots in the recovery, including wages and the housing market, are finally showing signs of life.

Will the momentum continue in 2015? In most areas, economists are optimistic that it will. To that end, here are the best guesses from the experts on what the economy will do next year: 

1. GDP growth will top 3 percent.

* Economists expect contraction to worsen

* Government forecasts GDP will drop four pct in 2015

* Rouble falls again in thin trade (Updates rouble trading)

By Elena Fabrichnaya and Alexander Winning

MOSCOW, Dec 29 (Reuters) - Russias economy shrank sharply in November and the rouble resumed its slide on Monday as Western sanctions and a slump in oil prices combined to inflict the first contraction in GDP since the global financial crisis.

The Economy Ministry said gross domestic product shrank 0.5 percent last month, the first drop since October 2009. With oil exports forming the backbone of the economy, analysts said the contraction is likely to worsen.

The slide on the oil market accelerated this month after the exporters group OPEC refused to cut output, and prices are down almost 50 percent from a peak in June. On top of this, the sanctions imposed over Moscows role in the Ukraine crisis have deterred foreign investment and led to over $100 billion flooding out of the Russian economy this year.

With the current oil price we expect things to get worse. There is no cause for optimism, said Dmitry Polevoy, chief economist for Russia and CIS at ING Bank in Moscow. This is linked to sanctions first of all, oil and the panic we saw on the market in December. The damage to the banking system and consumer sentiment will take a long time to repair.

The sanctions have severely reduced the ability of Russian companies to borrow abroad, triggering the worst currency crisis since Russia defaulted on its debt in 1998.

The rouble, which had strengthened on Friday, slumped over 6 percent against the dollar in early trade on Monday in thin trade, although it later regained some of the losses.

Overall the roubles weakness will inevitably lead to higher inflation next year by pushing up the cost of imports, threatening President Vladimir Putins reputation for ensuring Russias prosperity.

Government ministries forecast the slump in oil prices will lead to a 4 percent contraction of the economy next year and that inflation could exceed 10 percent.


The rouble had lost more than half of its value at one stage in December, although it has recovered since then after the government introduced informal capital controls and raised interest rates steeply.

The government issued orders to large state-controlled oil and gas exporters Gazprom and Rosneft to sell some of their dollar revenues to shore up the rouble.

Russians have kept a wary eye on the exchange rate since the collapse of the Soviet Union. Hyper-inflation wiped out their savings over several years in the early 1990s and the rouble collapsed again in 1998.

At 1400 GMT, the rouble had lost over 3 percent against the dollar and was trading at 56.00, hurt by exporters scaling back foreign-currency sales after meeting their end-of-month tax payments.

The Russian currency is much weaker than the 30-35 seen in the first half of the year but well up from an all-time low of around 80 per dollar in mid-December.

The roubles slide has prompted huge buying of foreign currency in Russia and heavy withdrawals of bank deposits, heaping pressure on a vulnerable banking sector whose access to Western capital markets is restricted by the sanctions.

On Friday, Russian authorities also significantly scaled up rescue funds for Trust Bank, saying they would provide up to $2.4 billion in loans to bail out the mid-sized lender, the first bank to fall victim to the crisis.

GRAPHIC: Falling oil price weighs on Russian economy and the rouble: link.reuters.com/nep63w (Writing by Dmitry Zhdannikov; editing by David Stamp)