The exchange rate dynamics has been favoring investment in imported machinery and equipment, although it harms the construction sector.
Real investment registered its smallest year-on-year drop in 15 months in November, although in monthly terms it presented its first negative data in three months. The exchange rate dynamics has been setting the pace for this variable, according to the views of specialists.
The consulting firm’s Monthly Gross Domestic Investment Index (IBIM) Orlando Ferreres had a 0.9% decrease compared to November 2023, the most limited since September of last year, when the downward trend began. While the machinery and equipment division registered an annual expansion of 10.4%, the construction division contracted 10.5%.
“In the sectoral detail, the investment is leveraged by the purchase of machinery and durable production equipment in general, particularly by the greater entry of imports. But Just as fixing the exchange rate encourages the entry of imported goods, it becomes an obstacle to construction since the ‘dollar underfoot’ together with inflation in pesos means that more and more dollars are needed per square meter built,” Ferreres explained.
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With these numbers, between January and November 2024, the variable in question accumulated a deterioration of 17.1% versus the same period in 2023. In Machinery and equipment the contraction was 10.2%, while in construction it was much deeper, 22.8%.
Besides, Compared to October of this year, a decrease of 0.9% was observedthe first negative variation since last August. When measured in dollars, Ferreres estimated an investment of US$7,293 million monthlys.
“Thinking about the evolution of investment over the next year, The exchange rate policy will be one of the most relevant variables to follow, along with the recovery of activity, salaries, and the progress of the RIGI“, concluded the consultant.
Source: Ambito
