President Macri with German Chancellor Angela Merkel and Chinese President XI Jinping at the 2017 G20 Summit in Hamburg, Germany. (Infobae)

The number of investments announced during June in Argentina dropped to its lowest in nineteen months, according to the Argentine Investment and International Trade Agency (AAICI). Some critics say the statistics call into question Macri’s optimism over the country’s economic development. “Argentina is entering the globalized world,” he declared last week at the G20 conference.

The AAICI’s most recent Investment Map, updated to June 30, breaks down the origin, destination, amount, and sectors of investment announcements that national and foreign companies make throughout the country. For the third consecutive month, both the number of commercial announcements and the total amounts decreased, with respect both to the previous quarter and to data recorded in the same period of the previous year. In the first half of 2017, AAICI registered 129 announcements for a total of USD $13.2 billion, compared with 149 and USD $21.8 billion at this time last year. In June, only six cases came in, the lowest number since December 2015.

Entrepreneurs point to three primary factors: high taxes, loss of competitive exchange, and the so-called “industry of lawsuits” in the labor market. The current administration is hesitant to raise taxes to reduce the federal deficit, since Argentina’s 35 percent corporate tax rate is already the highest in Latin America. The peso continues to devalue against the US dollar at a rate out of sync with inflation. Worker protections are expensive; the number of lawsuits filed in Buenos Aires for workplace accidents alone jumped from 58,000 in 2015 to 115,000 in 2016. As President Macri has delayed labor reforms, workers on strike drive down productivity.

All hope is not lost, however. Despite decreases in the last few months, the AAICI report anticipates that investment will recover in the second half of 2017, with announcements increasing annually by 10 percent. Macri brought US $110 billion back into the country after he allowed nationals with offshore investments to declare for a fee. 78 percent of them decided to repatriate funds, which brought revenue to Argentina. “Many companies have come back to trust our country,” said Juan Procaccini, Executive President of AAICI.

Trust from outside of Argentine appeared to be increasing too. According to Indec data, in the first quarter of this year, Foreign Direct Investment (FDI) grew at an annual rate of 30 percent. Public sector indicators show that the government is accelerating investments in petroleum, mining, telecommunications, infrastructure, and renewable energy. The AAICI’s Investment Monitor anticipates growth in public works and sale of transportation equipment in the next quarter.

Macri will host next year’s G20 summit in Buenos Aires. This year, he reopened free trade negotiations with the European Union and petitioned for Argentina’s inclusion in the Organization for Economic Cooperation and Development (OECD). It is possible that by the 2018 meeting, Macri’s vision will stack up better against investment data.