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Morning Edition · Sunday, October 11, 2026Published at 1:17 AM EDT · New York
Argentina Has Approved More Than $56 Billion in Projects Under Its Investment Incentive Regime, Yet Investment Keeps Falling
Capital formation has declined since early 2025, and economist Alberto Ades, who once backed the government's course, says the peso is too strong.
Projects approved under President Javier Milei's Incentive Regime for Large Investments (RIGI) now total more than $56 billion, according to Clarín. Actual capital formation has nevertheless declined since early 2025, mainly because of a slump in construction. Imports of capital goods are also falling, and the country is recording a net outflow of foreign currency.
Alberto Ades, an economist who previously supported the government's course, repeated his warning that the peso is overvalued. "I would like a higher exchange rate," he told Ámbito. He also said some businesses "will not survive" the economic transformation.
Some sectors are drawing interest. The Buenos Aires Times reports that Argentina has 67 registered data centers, 52 of them operating and 13 announced. The government hopes for billions in digital infrastructure investment, but concern is growing over energy use, water consumption and the small number of jobs the facilities create.
Old controls still discourage Argentines from using their savings. Ámbito describes a rule in force since 2015 that adds a 5% charge to certain travel purchases paid in cash, even when buyers use their own dollar savings. The charge works against the government's campaign to bring "mattress dollars," cash held outside banks, back into the formal economy.
Part of a tracked trend
Latin America's Fiscal Right Turn
Latin American voters keep choosing candidates who promise fiscal consolidation and market opening. Washington backs these candidates selectively with dollar liquidity, so each regional election reprices local currencies and sovereign risk, and the gains depend on governments keeping fiscal promises their economies have rarely sustained.
What this means
Milei's disinflation relies on holding the peso steady, and a strong peso in real terms makes local production expensive in dollars. That cuts margins in manufacturing and construction while favoring imports and spending abroad. The incentive regime attracts capital-intensive mining and energy projects that bring in dollars over many years, but those projects create few jobs and do not replace the construction activity that is falling now. From a sound-money view, the government has stopped printing money to finance deficits, which is the necessary step, but the exchange rate remains a managed price, and businesses invest only when they believe that price will last. Households keeping dollars outside banks are showing the same distrust. The likelier outcome is that the government keeps its exchange-rate band and continues approving large projects, while overall investment stays weak through mid-2027. That read fails if capital goods imports turn up for several months in a row. If the central bank's reserves fall, a faster step devaluation becomes the alternative outcome.
What to watch
- Monthly capital goods imports. A sustained increase would show that approved projects are turning into actual spending.
- Central bank reserve figures. Falling reserves would raise pressure for a faster adjustment of the peso.
- Whether the government removes the 5% cash travel surcharge. Removal would show it is serious about drawing household dollars into the banking system.
Observations to monitor, not financial advice.
Synthesized from: Clarín · Ámbito (Ades) · Buenos Aires Times · Ámbito (travel surcharge)
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