Investing in Argentina in 2017

Argentina always seems to go against the flow. While Latin American currencies, especially Mexican, devalued and pondered upon the unknown after Trump won the presidency, the Argentine Peso increased. Also, while many countries in the world lowered their interest ratio, Argentina increased them to 38% and later on changed them to 26%. And to add more to the oddness of the situation, the country also started the biggest indebtedness process of the whole region.

The Argentine president explains that indebtedness is the only way to avoid a bigger catastrophe, as it is used to create and help companies and jobs, improving economy and help funding financial deficit. Thus, creating the trust needed for international companies to be willing to invest in the country.

The Central Bank claims there’s nothing to worry about, as their GDP is saved in dollars. However, if an international crisis were to occur, the country would be in serious problems. But that’s not the case so far, hence making it a great place to do business and all their debts are being paid successfully.

Due to their new laws and agreements, it is possible to invest in pesos and exchange the currency without any restriction, which has improved the Argentinean currency and helped reduce the inflation that has harmed the country for so long. Sadly, this measure has also made people start buying houses or investing in Lebac (short-term debt titles in Argentina) because doing so is much more appealing than investing in the productive economy.

Even if inflation is still high, they have been able to reduce inflation. According to IMF, the country will start growing again in 2017 if things go well. For the time being, agriculture has started to recover and a great harvest is foreseen. Nevertheless, the real business right now is in the money.