Investment in Argentina ended 2024 with a 13.7% annual decline, the lowest level since 2020, largely due to factors such as devaluation, rising inflation, and the consequent decline in consumption. According to a report by Orlando J. Ferreres (OJF), investment in the country reached $79.670 billion, down from $103.621 billion recorded in 2023.
"The government's strong adjustment aimed primarily at controlling inflation, and in that sense, it has been successful, but it also caused a sharp drop in economic activity and wages at the beginning of 2024, resulting in a decrease in investment," explained Rosendo Plana from OJF.
The consultancy notes that the low investment was influenced by a 21.6% drop in the construction sector and a 6.1% decrease in machinery and equipment, mainly due to the sharp reduction in imports caused by devaluation. However, a better outlook for investment is expected in the near future.
From the mentioned consultancy, a 10% increase in investment is projected for this year 2025, attributed to a more stable macroeconomic situation, a general improvement in wages, and a rebound in economic activity. A recovery in machinery imports is expected, although it is warned that a delayed exchange rate remains an obstacle for construction and that a reduction in country risk will be crucial to attract investments.
After eleven consecutive months of year-on-year declines, in December, investment in the country recorded a 19.9% year-on-year increase, which could indicate a positive trend change in the Argentine economic outlook.
