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Businesses in Argentina Face Uncertainty and High Inflation: Latest VISTAGE Index Shows Concerns About Profitability

ByEditor

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

The latest VISTAGE Argentina Business Confidence Index paints a concerning picture for the profitability of the private sector. This index has been prepared since 2006 and includes opinions from 355 businesspeople CEOs, senior executives, and business owners on the current economic scenario in Argentina and the future of their organizations.

In this measurement, 83% of participants believe that the economy worsened compared to a year ago, while only 13% estimate that it remained unchanged. Looking ahead to the next 12 months, half (50%) think that the situation will deteriorate further, while only 37% believe it will improve. These findings suggest that political-economic uncertainty is having a significant impact on businesses in Argentina.

Regarding investment in fixed assets for next year, nearly half (47%) believe it will remain unchanged, while only 31% indicate it will decrease and 22% say it will increase. With high inflation involved, only 44% expect their company’s turnover to grow in the next year, while 32% predict a decline and 24% do not anticipate any changes. These results also suggest that uncertainty is affecting businesses’ investment decisions in Argentina.

According to Guadalupe San Martín, CEO of Vistage Argentina, “The results of the Index convey the impact of political-economic uncertainty. The increases in prices of products and services and the decrease in profitability of companies are some of the most worrying conclusions.” However, despite these challenges, almost six out of ten business leaders do not believe that this will translate into job cuts. It remains to be seen if this optimism is well-founded or just wishful thinking.

Overall, this index paints an unfavorable scenario for the profitability of private businesses in Argentina due to political-economic uncertainty and high inflation rates.

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