• Sat. Mar 2nd, 2024

Argentina Business Confidence Index: Private Sector Profitability Takes a Hit Amid Political-Economic Uncertainty

ByEditor

Feb 13, 2024
Business owners are gearing up for a year of increased revenue, but reduced profits.

The latest edition of the VISTAGE Argentina Business Confidence Index presents a bleak outlook for the profitability of the private sector. This index has been prepared since 2006, and the study corresponding to the fourth and last quarter of 2023 included 355 businesspeople, CEOs, senior executives, and business owners who provided their opinions on the current economic scenario in Argentina and the future of their organizations.

In this measurement, 83% of respondents considered that the economy had worsened compared to a year ago, while 13% estimated that it remained unchanged. Looking ahead to the next 12 months, 50% thought that the situation would get worse, 37% believed it would be better, and 13% thought there would be no changes. These results indicate that political-economic uncertainty is having a significant impact on businesses in Argentina.

Furthermore, investment in fixed assets for next year remains uncertain. According to the survey results, 47% believe that it will remain unchanged, while 31% expect it to decrease and only 22% anticipate an increase in investment. With high inflation involved in Argentina’s economy, companies are also unsure about their turnover growth prospects in the next year. While 44% predict that their company’s turnover will grow over the next twelve months, there are also those who expect a decrease (32%) or no changes at all (24%).

Profitability is another critical concern for businesses operating in Argentina. Over half of respondents (55%) anticipate a decline in profitability over the next year. For them, this translates into a potential reduction in workforce size – something they hope will not happen as they expect only about one-third (60%) of them to reduce their employee numbers despite these concerns about profitability and uncertainty surrounding investment opportunities.

The results from this index highlight how political-economic instability can negatively impact businesses’ operations and profitability projections in Argentina. Despite these challenges, however, many companies remain optimistic about their ability to adapt and survive through difficult times.

According to Guadalupe San Martín

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