A survey conducted by the private image consulting firm SEL indicates that the expropriation of YPF has had a negative effect on the business climate in Argentina, according to seven of the 10 corporate managers surveyed. The business climate is considered definitely bad by 31% of the companies surveyed, compared with 22% last year, while 59% of respondents described it as tolerable or so-so. The companies’ list of concerns includes the import controls and the restrictions on transferring dividends.
Among multinational companies, 56% believe that investment prospects have been badly affected by the YPF affair, while domestic firms were less pessimistic, with only 20% sharing this opinion. However, another 31% of multinationals and 44% of domestic firms believe that the expropriation will have some kind on negative impact on investment.
Only 11% of companies plan to increase the number of job positions next year, compared with 27% at this time last year, while 15% are considering reducing their workforce, compared with 10% last year.
Private investment has been the most affected metric this year, and the growth prospects are very poor. According to estimates made by private consultancies, private investment fell by 4.7% YoY in February and 5.3% YoY in March. Capital goods imports also fell by 22% and 29% YoY, respectively, for those two months. Many are now forecasting a sharp deceleration in economic activity for this year…