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Argentina has opened up a range of sectors: New Multi-layered investment options

image of Doing business in Argentina

HEADING UP

Argentina’s reforms are pushing the economy in the right direction
When Mauricio Macri came to power in late 2015 and promised to fix Argentina’s distorted economy it caught the world’s attention. In the LatAm INVESTOR Argentina Report published in Q2 2016, they described how closed sectors were being opened up for international investors. Two years later we’re back with an update.

Macri’s first 100 days were a whirlwind of rapid changes, as he tackled the most perverse distortions in the Argentine economy. However, since then he has followed a policy of gradualismo that has looked to slowly fix Argentina’s economy, rather than implement a Chicago-school shock. It has yielded political results, with Macri’s government improving its position in the mid-terms, and returned Argentina to economic growth.

However,gradualismo also meant that Argentina’s large fiscal and current account deficit continued, leaving the country at the mercy of international investors. At first that worked well, with the market happy to lend Argentina money. But as the US interest rate environment has tightened, capital has started to leave Argentina. A run on the peso forced the Central Bank to increase interest rates to 40%, while the government has increased deficit cuts and requested IMF help.

Source: Latam Investor

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