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How the US describes the Argentine economy: 'high inflation', 'uncertainty' and 'interventionism'

2021-07-21T20:41:42.696Z

In a routine report on the investment climate in the country, Washington picks up complaints from companies of high and uncertain tax burdens.



Ezequiel Burgo

07/21/2021 5:20 PM

  • Clarín.com

  • Economy

Updated 07/21/2021 5:20 PM

The US State Department published its traditional profile on the investment climate in different countries, including Argentina. It is a routine document in which the Washington administration outlines the main features of the economy and business community in Argentina. The paper is primarily aimed at US companies and investors who operate here or are interested in doing so.

More than 300 American companies operate in Argentina

, and the United States remains the leading investor in Argentina with more than USD $ 10.7 billion (shares) of foreign direct investment as of 2019.

This year's report starts the same as that of 2020. "Argentina presents investment and trade opportunities, particularly in agriculture, energy, health, infrastructure, information technology and mining." But he continues that "

economic uncertainty

,

interventionist policies

,

high inflation

and

persistent economic stagnation

have prevented the country from maximizing its potential." Last year, increased debt (now restructured) was noted as a risk.

The State Department report elaborates on the uncertainty aspect in a later section of the report. "Both domestic and foreign companies frequently point to a

high and unpredictable tax burden

and rigid labor laws, which make it difficult to respond to changing macroeconomic conditions, as obstacles to greater investment in Argentina. In July 2020, the government passed a law of teleworking that imposed

restrictive regulations on remote work

. The law discourages companies from granting flexibility in the workplace and reducing labor costs through teleworking. "

In 2019, Argentina ranked 36th out of 41 countries evaluated in the World Economic Forum (WEF) Competitiveness Ranking, which measures the productivity with which a country uses its available resources.

The report recognizes that the Argentine government has identified among its main economic priorities for 2021 "to resolve its debt situation with the IMF, control inflation, respond to the COVID-19 pandemic by providing financial assistance to the most vulnerable sectors of society. ". Inform your companies that although the Foreign Ministry became the main government entity for investment promotion, "the Fernández administration does not have a formal business round table or other dialogue established with international investors, although it does interact with national companies. and international ". And he adds that "market regulations such as capital controls,trade restrictions and price controls increase the economic distortion that hampers the investment climate in the country. "

Argentina is currently

negotiating its debt with the IMF (about US $ 47,000 million)

and in this context, the previous week, the Minister of Economy, Martín Guzmán, met with his American

counterpart Janet Yellen

, in the framework of the Summit of Minister of Finance in Italy. According to Economía, the meeting was very positive. The second meeting was discussed with a Treasury representative after seeing

Wally Adeyemo

, two from Yellen, who asked for "a solid plan" for Argentina in the face of negotiations with the IMF. 


Source: clarin

All business articles on 2021-07-21

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