Annual publication on the evolution of foreign direct investment liabilities in companies in the country, in force from 2004 to 2016.

These statistics were based on the information obtained in the Survey of Direct Investments in resident companies provided by Communication A4237 and complementary ones, which was replaced by the Survey of External Assets and Liabilities established by Communication A6401 based on the information for 2017.

Executive Summary

The gross passive position of foreign direct investment in Argentine companies totaled US$ 79,902 million as of December 31, 2008, 4% higher than at the end of 2007. It consisted of a stock of US$ 58,890 million (74%) of investment in the capital of Argentine FDI companies, both in the non-financial private sector (NFPS) and the financial sector (NFPS), and US$ 21,012 million (26%) of indebtedness of NFPS FDI companies with their parent companies and/or subsidiaries abroad.

Net flows in 2008 reached a record value of US$ 9,546 million, with a 25% increase over the previous year’s flows. The impact of these flows on the change in the gross position of foreign direct investment was attenuated by valuation effects on the currency of account, the U.S. dollar.

The largest increases in flows in the period compared to the previous year were in indebtedness with parent companies and subsidiaries, income from contributions and purchases of local companies by non-residents. On the other hand, there was a decrease in the amount of reinvestments of profits, basically due to the behavior registered in the oil sector.

In 2008, the nominal amount of gross FDI debt increased by US$3,527 million, basically due to an increase of US$2,099 million in debt from imports of goods.

Capital contributions to FDI companies grew by 40% compared to the previous year, reaching a value of US$ 3,402 million during the course of 2008. Cash contributions reached US$ 2,697 million (79% of the total), constituting the highest amount in the series, which has been surveyed since 2005. On the other hand, flows corresponding to debt capitalizations reached US$ 704 million.

During the last year, FDI flows from transfers of equity holdings in local companies implied a record net income of US$ 558 million. This result was the result of 62 purchase operations by non-residents to residents totaling US$ 818 million and 71 sales operations by non-residents to residents that reached a total amount of US$ 260 million.

The reinvestments of profits and dividends totaled a value of US$ 2,060 million, or 22% of the profits for the period, compared to values for the three-year period 2005-2007 that were on average between 40% and 50% of the profits for the period.

The top 10 direct investment companies, in terms of their gross passive position, accounted for 21 per cent of the total position (compared with 24 per cent at the end of 2007), while the top 200 companies accounted for just under three-quarters of the total, with a value similar to that recorded at the end of the previous year.

The analysis by country of the gross passive position of foreign direct investment showed, at the first level of holding, that Spain (US$ 22,991 million) and the United States (US$ 13,622 million) held 46% of direct investments in Argentina as of 31.12.2008. As in the previous year, behind these countries were the Netherlands (US$ 6,421 million), Brazil (US$ 4,786 million) and Chile (US$ 4,181 million).

The automotive industry became the main recipient of FDI flows throughout 2008 (US$ 1,667 million, 17.4% of the total) due to the greater indebtedness with parent companies and subsidiaries. The oil sector was the only one in which negative flows were recorded in the accumulated of the year (US$ 510 million).

In the context of the international financial crisis, the average quarterly income recorded in 2008 was slightly lower than in 2007, basically due to the sharp reduction recorded in the last quarter of the year. The average quarterly income in 2008 reached a value of US$ 2,521 million compared to US$ 2,626 million in 2007, US$ 2,498 million in 2006 and US$ 1,947 million in 2005.