Argentina says foreign direct investment to double in 2017

AP News
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Posted: Feb 02, 2017 4:59 PM

BUENOS AIRES, Argentina (AP) — Argentina's foreign direct investment is expected to double in 2017 from last year's $4 billion largely due to upcoming auctions for renewable and non-renewable energy projects, Treasury Minister Nicolas Dujovne said Thursday.

Investors have praised President Mauricio Macri's decision to cut government spending, reduce taxes on exports and end economic distortions that led to years of high inflation under his predecessor. But the government has struggled to lure foreign investment and bring South America's second-largest economy out of recession.

"It's hard to put a number to it, but it will be much higher than in 2016," Dujovne said during a meeting with foreign correspondents in the presidential palace. But "just with the execution of the payments for the bids on renewable and non-renewable, the FDI (foreign direct investment) will at least double in 2017 from 2016."

Since succeeding left-leaning President Cristina Fernandez last year, Macri has struck a deal with U.S. creditors to return Argentina to global bond markets for the first time in 15 years. He also has rolled back restrictions on buying U.S. dollars and reduced taxes on exports and other protectionist measures. But inflation remains high and is still one of the biggest concerns for Argentines.

Macri's decision to drop the previous government's foreign exchange controls led to a sharp devaluation of the peso. Job cuts and the slashing of utility subsidies have also stoked unrest in a nation with a long tradition of providing generous state jobs and benefits. On Thursday, Argentina's largest umbrella union, the CGT, announced that it would stage a nationwide strike March 7.