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 (FDI) in Argentine companies reached a record US$ 96,089 million as of December 31, 2011, with a year-on-year increase of more than 8%. Of this amount, US$ 70,804 million (73.7%) corresponded to the book value of the shares of non-resident investors in the net worth of companies in the private financial sector (SPF) and non-financial sector (NFPS), and the remaining US$ 25,285 million (26.3%) corresponded to gross indebtedness of NFPS FDI companies with their parent companies and/or subsidiaries abroad.

Since 2004, the year in which the BCRA survey began to measure the FDI position, there has been an increase in the passive position of FDI of US$ 39,139 million, a variation that implies an average annual growth rate of close to 8%. In this regard, it should be noted that this increase in foreign direct investment, which basically reflects investment decisions with a medium- and long-term horizon, occurred within the framework of policies aimed at discouraging the entry of short-term capital.

Of the FDI stock as of December 31, 2011, 44% corresponded to investments in the industry and agriculture sector (US$ 42,063 million) and 26% in the exploitation of natural resources (US$ 24,636 million); while investments in the services sector (including the financial sector) accounted for the remaining 30%.

At the end of 2011, Spain continued to be the main country of origin of investments with US$ 22,600 million, considering the first level of holding, although losing relative importance in the last year, falling from 26.2% to 23.5% of total holdings. In second place was the United States again (US$ 16,843 million, 17.5% of total holdings), followed by the Netherlands (US$ 7,343 million, which maintained its share close to 8%), Brazil and Chile with a 7% share in both cases. The latter were, among the main FDI countries, the ones that showed the greatest relative increase in 2011 (more than 20%), consolidating themselves as the largest investors in the region in the country.

FDI capital inflows throughout 2011 totaled US$ 11,455 million (equivalent to 2.6% of the Gross Domestic Product), an amount that constituted a record value since the beginning of the series. This result was mainly due to the reinvestment of profits of US$ 6,696 million (implying a rate of reinvestment of profits of 44%), followed by net capital contributions of US$ 4,229 million and US$ 2,348 million due to the net increase in debt with parent companies and foreign subsidiaries of NFPS FDI companies. with the three components reaching a maximum for each of them from the beginning of the series. These revenues were partially offset by expenditures from stock transfers of US$ 1,817 million.

In 2011, 47% of FDI capital flows (US$ 5,406 million) corresponded to investments in companies that export goods, while the group of FDI companies that do not usually export registered record revenues of US$ 6,049 million in 2011.

As throughout almost the entire series, the industry and agriculture sector became the largest recipient of FDI flows with net inflows of US$ 6,154 million, an amount that represented 54% of the total net flows received in the year by FDI companies. For its part, the group of service companies received FDI flows for a record amount of US$ 929 million in the financial sector and US$ 3,585 million in the rest of the service companies (both with an increase of 100% year-on-year). On the other hand, in the natural resources sector, flows fell in year-on-year terms due to the effect of stock transfers in the oil sector. The group of mining companies (net revenues of US$ 1,111 million) became the main recipient of direct investments from the group of companies dedicated to the exploitation of natural resources. This result was the result of new net contributions to the sector of US$ 1,346 million.

The income generated by FDI reached a record of US$ 15,278 million in 2011, registering a year-on-year increase of 23%, corresponding to US$ 14,894 million to profits and dividends accrued and US$ 384 million to interest on indebtedness with related companies. The return on capital, measured on equity, increased by 3 percentage points in 2011, reaching an annual value of 21.9%.