Every month the consulting firm Orlando Ferreres & Asociados publishes the Monthly Gross Internal Investment Index (Ibim), which combines eight statistical series to build an indicator that allows to measure the evolution of the Gross Internal Fixed Investment in its entirety. In its report of September 28, the consulting firm pointed out that the data released by the Ibim-OJF allow estimating for August a fall in investment of 11.7% per year, measured in terms of physical volume (discounting the price effect). In this way, the first eight months of the year accumulate a year-on-year drop of 14.9%. In the measurement in dollars, an investment of US $ 5,625 million is observed, accumulating in eight months a total of US $ 41,620 million.
Central headings. The report details that investment in machinery and durable production equipment registered a 10.8% drop in August compared to the same month last year, showing a slight improvement compared to the result of the previous two months. In the detail by origin, investment in machinery of national production had an annual contraction of 1%, while investment in imported equipment fell 17.4%. Thus, the accumulated of this section for the first eight months of the year shows a contraction of 13.3% compared to the same period of the previous year. Meanwhile, investment in construction fell by 12.7% annually in August, thus adding 13 consecutive months with negative interannual variations. In this way, the sector accumulates a decrease of 16.6% for the elapsed months of this year.
“The rebound of the expected fall due to the effect of confinement in the context of the pandemic seems to have reached its ceiling and we no longer expect investment to improve due to an eventual end or relaxation of health measures. The greatest determining factors today are related to the persistent economic recession with no prospect of improvement in the medium term, with the weakness of macroeconomic indicators and with the lack of confidence of the agents in the government’s economic direction ”, details the work of the consultancy directed by Ferreres.
Bags on alert. This week, investment was one of the axes on which the analysis of the presidents of the Córdoba, Buenos Aires and Rosario stock exchanges settled. Manuel Tagle, Guillermo Carracedo and Daniel Nasini shared an analysis panel on the occasion of the 120th anniversary of the local Stock Exchange. The concern about the fall in investment and the few incentives to generate productive investment in the medium term was a common denominator in his reflections: “A few years ago, when the productive investor from abroad asked, you knew what to answer; not today. The head of the financial investor has a short-term look because he can make a short-term stop loss, but the productive investor cannot. The financial investor can have a short-term view of the Government, yesterday there was a tender for short-term bonds and the amount sought was tripled. But the productive investor needs to see something long term to define whether or not to put an investment. Argentina needs an avalanche of new investments if it wants to get ahead and they have to come from abroad, ”said Carracedo.
Tagle emphasized the need to energize the Central Region and change the strategy of claims and requests, to incorporate the how to the pursuit of the objectives pursued by the private establishment: “If we do not say how to achieve the objectives and on what basis , we generate confusion. We must ask the President to say that these measures are transitory and that then we must work on measures for macroeconomic reconstruction, lower the deficit and go towards a monetary stability objective, because with inflation it is very difficult to have sustainable growth.
Finally, Nasini pointed out that the real economy needs a plan to attract investment and that what is seen now are some measures, but not a defined course: “We are thinking of a long-term plan for agribusiness because we see it as the largest generator of foreign exchange in the country. The waterway has to be done with a tender and achieve a deepening of the Paraná. It is an external and private investment that is paid with the cargo toll, but when we talk about infrastructure we have to plan it, if we do not have a long-term plan and we go with temporary measures it is not enough, we must change that course, change the pressure tax on production, get into the labyrinth of co-participation, make the effort to grow the Central Region ”.