Will Argentina break its FDI slump in 2016?
In the past four years, Argentina has witnessed jobs, projects and capital expenditure dropping off. However figures for the first half of 2016 are more promising. Edna Rodriguez reports.
Data from greenfield investment monitor fDi Markets shows Argentina has experienced a downward investment trend between 2012 and 2015. During this period, 280 FDI projects were recorded (excluding retail), representing a total capital investment of $16.8bn, and 50,696 jobs were also created.
There were 91 projects recorded during 2012, leading to the creation of 15,873 jobs. Although in 2013 there was a decrease in project numbers of 1.09%, jobs increased by 13.91%.
In the following year, however, there was a decline in projects as well as job creation, of 35.55% and 39.37%, respectively. The trend continued in 2015, with a decline of 29.31% in project numbers and 47.29% in jobs.
Capital investment also experienced a year-on-year decline during the four-year period. Argentina secured $5.81bn in capex during 2012 but by 2015 this fell to $2.86bn, representing a staggering drop of 50.72%.
During 2012 to 2015, Buenos Aires was the strongest city in the country, holding the highest market share across the board, with 27.5% in terms of project numbers, 10.34% in capex market, and 13.92% in job creation.
The top three sectors for FDI in the country were software and IT services, with 37 projects; communications with 39 projects; and financial services with 28 projects. Last year, 15 projects were recorded during the first half. So far, the first and second quarters of 2016 have been healthier than 2015, with 26 projects recorded. This could signal an end to the downward trend.
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