In seasonally adjusted terms, the Monthly Investment Indicator prepared by the institute showed an increase of 4.3%, after four months with consecutive falls.
Hand in hand with a recovery of the activityas highlighted by EMAE released on Wednesday by the INDECin January too an improvement in investment levels was observed. This is clear from a private study, which reports progress compared to the previous month.
The Monthly Investment Indicator (IMI) carried out by the Institute of Labor and Economy (ITE) of the Germán Abdala Foundation presented in January an increase of 4.3% in the seasonally adjusted comparison, thus ending four consecutive months of decline. In the interannual variation, meanwhile, the index registered a fall of 0.8%, moderating in relation to the data for December (it had presented a contraction of 14.2% per year).
“Construction had an annual increase of 2.7%. However, Durable Production Equipment (EDP) presented a drop of -4.9%”, explained the study, which added: “Investment in National Production Durable Equipment (EDPN) exhibited an annual increase of 15.7%. In turn, Imported Durable Production Equipment (EDPI) had an annual decrease of -11.3%. Since September it has been moderating its growth and already presents two consecutive falls, this is determined by the very dynamics adopted by the Ministry of Economy with the regulation of foreign trade”.
Days ago, the Secretary of Industry and Productive Development, José Ignacio De Mendiguren, pointed out in this regard: “The industry is 15% above the pre-pandemic level and in the last two months it has grown again. Despite the war and the drought, we have the highest level of investment in the last 8 years and unemployment today is better than in the last 8 years, at 6.5%”.
outlook for the future
In any case, with a view to what may happen in terms of investment in the coming months, some private projections reveal a series of challenges. For example, according to the Gross Internal Monthly Investment (IBIM) report carried out by the Orlando Ferreres consultancy, a contraction of 3.2% year-on-year was observed in February, measured in terms of physical volume (not counting the effect of inflation). In the first two months of the year, it accumulated an advance of 1.3%.
“After a slowdown in growth during the second half of last year, in the last three months we have seen two with negative figures. Thus, the contractive trend of investment already seems evident. The lack of dollars is undoubtedly the main stumbling block for the advancement of investments, although the lower economic activity, macroeconomic instability and political uncertainty surely contribute to tempering the investment decisions of economic agents. Going forward we do not see a change of context that could justify a modification of the current trend”, explained from the Orlando Ferreres consultancy.
Meanwhile, after analyzing the evolution of GDP during 2022, the firm LCG projected: “In the middle of an election year and a fragile macroeconomic context (triple-digit inflation, greater obstacles to imports and a compromised debt maturity profile in Treasury pesos) investment is unlikely to continue exhibiting the vigorous growth it showed in 2022”.
In fact, as highlighted by the consultancy, “investment managed to average 21.2% of GDP in 2022, its highest point in 20 years.” “It was made up of 58% of durable Production Equipment, 6 pp above the average of the last two decades. On the other hand, Construction represented 36% of the investments, 5 pp below the average”, highlighted from LCG, and concluded: “This exhibits a certain change in the morphology of Argentine investment, with a productive bias to the detriment of assets considered stores of value, but with a very low productive value”.
Source: Ambito
