The FLEXIBILIZATION OF THE CEPO arranged by the Government and the opening In financial and investment matters they seemed to have given a opposite result to the expected. According to data from the Central Bank (BCRA), In the first five months of 2025, foreign direct investment (FDI) in Argentina registered a negative net balance of US $ 1,679 millionthat is, a net exit of dollars, which implies the worst result for at least the last 10 years.
This balance is derived from total income so far this year for US $ 551 million and expenditures for US $ 2,190 million, confirming the continuity of the negative trend observed in 2024.
For specialists consulted, There does not seem to have a single factor that explains the result: They cite, for example, the progressive deterioration of investment confidence, marked by economic uncertainty; political instability -more intense at this time from a greater weakness of the government in Congress-; and structural reforms that, in the opinion of the experts, failed to materialize in time to sustain the entry of capital to the country.
At the same time, it is mentioned that a complex financial front resulted in a rescue of the IMF for US $ 20,000 million – in addition to other characteristics of the current economic model such as the fall in consumption and the brake of public works – and seem to have encouraged the Capital repatriation instead of new productive bets.
Strictly speaking, if the data in recent months are seen, Since the end of 2024 net exits are recorded. Traditionally attractive sectors, such as mining (especially Lithium and Muerta Vaca) and the manufacturing industry, have shown some resilience, but have failed to counteract capital outputs.
“The release of the exchange rate, implemented by the BCRA as of April 14 through communications” A “8226 and 8227, seems to have encouraged the repatriation of capital instead of new productive investments, added to a global context of high interest rates and lower demand for commodities, which has placed Argentina in disadvantage in front of countries with greater countries with greater macroeconomic stability,” they said in macroeconomic stability A macroeconomic consultant.
“In general, foreign direct investment is a fundamental source of foreign exchange that provides the dose of stability and longplacism that countries need. However, with the exchange restrictions that still weigh in the corporate sector and the fall of confidence in the local financial front, this dynamic produces the difficulties of the government to increase international reserves,” he added.
Monthly Performance of Foreign Investment in 2025
The data of the BCRA They show irregular but predominantly negative evolution in FDI flows during the first five months of 2025:
- January: Negative balance of US $178 million, marking a weak year for investment flows.
- February: The negative trend was aggravated, with a negative balance of US $ 1,050 million, the worst registration of the period, reflecting strong capital exits.
- March: A slight rebound with a positive balance of US $ 97 million, suggesting a brief impulse in capital revenues, possibly linked to specific sectors such as mining.
- April: New fall with a negative balance of US $ 659 million, coinciding with the release of the exchange rate from April 14, which could have provided capital outputs.
- May: Slight recovery with a positive balance of US $ 109 million, although insufficient to reverse the general trend.
2024: The year that the decline began
2024 had already marked a critical point for FDI in Argentina, with A 54% drop in net flows compared to 2023moving from US $23,866 million au $ s10.996 million. The fourth quarter of 2024 registered net expenditures of US $ 356 million, driven by debt cancellations (US $ 1,425 million) and departures by mergers and acquisitions (US $ 822 million), partially compensated for profit reinvestment (US $ 1,158 million) and capital contributions (U $ S733 million).
The most dynamic sectors were the exploitation of mines and quarries (US $ 1,722 million) and the deposit collectors (US $ 782 million), while the manufacturing industry and trade faced net desired debt. Despite measures such as the incentive regime for large investments (Rigi), the results did not meet expectations, and capital repatriation, especially in the energy sector, marked a turning point in December.
Another key factor is the negative perception of the international marketsupported by analysis of financial institutions. A recent report of JP Morgan recommended that investors leave the “Carry Trade” In Argentina, citing growing risks due to exchange volatility and political uncertainty, which reinforces the tendency to departure from capital. Similarly, Morgan Stanley decided Do not raise Argentina’s qualification as a “standalone” market, maintaining a cautious vision of its attraction for foreign investment.
They argue that this perception of country risk, which remains high, added to logistics and bureaucratic challenges, reduces interest in strategic sectors such as lithium or lift gas. In addition, the fall in international prices of certain commodities, such as lithium, has decreased interest in mining exploitation projects, which historically have been an IED pillar in the country.
Perspectives and challenges to increase foreign direct investment
In spite of promised projects under the Rigi, such as the pipeline in Río Negro or a liquefaction ship with projected investments of US $ 3,000 million, the immediate results have been limited. The absence of new size projects and political and economic uncertainty have stopped the entry of fresh capitals. To reverse this trend, in the corporate sector they believe that it will be crucial that the government implement measures that reinforce investment confidence, stabilize macroeconomics and promote a more predictable environment for business.
In conclusion, the FDI in Argentina faces a critical scenario in 2025, with a net negative balance of US $ 1,679 million and a trend that continues the decline of 2024. The monthly data shows a volatile dynamic, with brief insufficient rebounds to reverse capital outputs. In experts’ opinion, the recovery of investment flows will depend on the country’s capacity to generate stability and take their competitive advantages, such as natural resources and an industrial base developed.
Source: Ambito
