Argentina braced for recession

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Inside San Telmo antiques market, Buenos Aires.

By Candace Piette BBC News, Buenos Aires

San Telmo is a lovely neighbourhood of Buenos Aires, full of cobbled streets, colonial mansions and tree-lined squares. Now a major tourist destination, it has been gentrifying fast in the last decade of economic boom in Argentina.

As the country's economy recuperated after the last big crash in 2001, dozens of restaurants, guesthouses and pavement cafes opened in San Telmo. GLOBAL MARKETPLACES A look at how the global economic crisis is affecting markets in cities around the worldClick on the tabs at the top of the page for a tour of Dubai's gold souk, a craft market in Lagos, a car boot sale in London and the bustling Crawford market in Mumbai

In the past few years, fancy boutiques and shops have sprung up and foreigner-fuelled demand has made property prices soar.

At the heart of the neighbourhood is Plaza Dorrego: a tree-lined square which hosts the extremely popular Sunday flea market, the Feria de San Telmo.

Streets are closed to traffic and the square itself is filled with dozens of stalls selling antiques and old collectibles. Street performers form immobile human statues while entire tango orchestras perform to the crowds.

Among the stalls selling antique hats, copperware, old silver-decorated horse bridles and whips is that of Alberto Marroco Guerra.

He sells small gourds, hand-finished and carved with your name on the spot, if you want. Argentines use a silver straw to drink a traditional herbal tea from the gourds, known as "mate". The Argentine president has warned that the coming year will be difficult

"We've experienced a drop in sales here, in all sectors of the market; we keep lowering the prices, but sales keep dropping," says Mr Guerra.

"It's not like it was a few years ago, now we have to manage with what little we can sell."

As the external crisis begins to bite elsewhere, the market still seems packed with foreigners enjoying the Europeanised charm of Buenos Aires.

Brazilians are here taking advantage of the good exchange rates, and Americans are still around, enjoying cheap excellent steaks, and good hotel rates in the "Paris of South America". But will they keep spending?

Storm clouds

Bautista Monte Santo is at the next stall, selling jewel-coloured antique soda siphons, many more than 80 years old.

"I had to bring my prices down but people still want to take a souvenir away and buy something typical like this, so I am not too unhappy."

Others are more concerned about the economic storm clouds gathering.

"We have relied on the tourist trade here in the market, but the US dollar is down. We need to see it go up again, so the tourists keep coming," says Cecilia Tornu, a tapestry restorer selling antique tiles and iron work.

"I love this market, for me there is no work now with tapestries because of the crisis, but now the tourists aren't buying as they did in the past. They think twice."San Telmo's stallholders are feeling the pinch of a downturn in sales

Argentina's president, Cristina Fernandez de Kirchner, has begun warning Argentines that the coming year will be difficult and that the global crisis will finally begin to affect them.

In her speech to Congress on its first day of work after the long summer break, she warned that little was known about how long the crisis would last but that all Argentines must pull together.

Exports of the country's lucrative cereal crops have dropped 40%, industrial output is also down and Argentines are consuming less, in common with nations elsewhere, as they gird their loins for a long battle with a coming recession.

But most sellers in the market take the dark storm clouds gathering stoically.

"We Argentines are used to economic crisis," says Cecilia Tornu.

"We are used to an economy that goes up and then down, up and down. It will not be as hard for us as it is elsewhere in the world to survive this one."