Economy Argentina 2022 - 2032

[HansonYes]

First, I'd like to say I've been in and out of Argentina for over a decade. I'm not one of those starry eyed gringos that comes to Argentina for a month, never leaves Puerto Madero and thinks everything is great.

I don't underestimate the ability of Argentina and their politicians to screw things up even worse than there are now. I still think there needs to be washout of sorts for asset prices in Argentina in the short term.

That being said, I do believe that with the war in Ukraine and Russia taking energy, minerals and food off of the global market for years to come, Argentina is in a very good position.

Argentina has shale oil, mineral inputs for batteries, food, water, population growth.

Does this windfall get evaporated by unsustainable subsidies and corrupt politicians? Infrastructure doesn't get built to take advantage of resource extraction? Regulatory framework is so bad Argentina gets ignored for other markets.

There are lot of doomsday predications for Argentina on this forum and after living in the country for a while, it's easy to fall into that type of thinking.

Is there a chance Argentina has another period of solid growth on the horizon?

 

[AddaNights]

Coming from a tech perspective -- I think latin america's timezone and cultural similarities to the USA, Mexico, (and Brazil, as a large market) make remote work a potential economic game changer. There's even timezone overlap with Europe.

I'm naive about the relative market sizes of tech and something like shale oil or manufacturing, but I include other skilled professions in addition to tech.

However, I have seen and expect to see more US companies outsourcing software development to latin america instead of India or europe. The labor rates are still good and Argentinians are absolutely as capable as my peers in the U.S. In Colombia, the phenomenon of software developers working remotely has produced other industries, like cafes, that cater to the market. If remote work becomes standard in the U.S., and infrastructure exists to support it, who cares if the developer behind the slack icon is based in Ohio or Cordoba so long as they work the same hours, speak english, and are talented.

Maybe doctors, lawyers, accountants, musicians, personal assistants, academics, and other skilled professions could render opinions remotely (US regulations, of course, need to be considered). America is already benefiting from skilled labor in the form of immigration, but perhaps remote work could enable the same dynamics without the brain drain -- such that skilled workers can stay here with their families. Of course, if they have experience in the U.S. they might decide to move there, but remote work could offer a new alternative.

As somebody who works remotely, I really can't emphasize enough how important the time zone is.

 

[Toronga]

I don't know about you guys but I'm buying pesos. This ship is turning around!

 

[HansonYes]

Anyone else believe that the next 12 to 18 months are going to provide 2002 type opportunities for buying distressed assets in Arg?

 

[earlyretirement]

Anyone else believe that the next 12 to 18 months are going to provide 2002 type opportunities for buying distressed assets in Arg?

Nope. Real estate will never get as cheap as it was in 2002 in Argentina. Everything was at fire sale prices then. You have to remember that many people that had money trapped in the banks couldn't withdraw it. The banks were limiting to something crazy like $400 US equivalent a month back then. Almost no one was buying then.

Prices were in free fall. The market is lower vs. peak prices but prices are still relatively high price per m2. Just like real estate prices in the USA in 2010-2012ish, prices will simply never go back to those levels again. That was the bottom.

I'm speaking about real estate. I'm not expert in other types of distressed assets in Argentina. Just out of curiosity, what do you believe Reply Guy the "distressed assets" that might be at bargain basement 2002 type prices?

 

[Milton12]

Anyone else believe that the next 12 to 18 months are going to provide 2002 type opportunities for buying distressed assets in Arg?

Personally, I think the whole world is in for a wild ride, and possibly Armageddon. There's no telling what happens next.

 

[Milton12]

Nope. Real estate will never get as cheap as it was in 2002 in Argentina. Everything was at fire sale prices then. You have to remember that many people that had money trapped in the banks couldn't withdraw it. The banks were limiting to something crazy like $400 US equivalent a month back then. Almost no one was buying then.

Prices were in free fall. The market is lower vs. peak prices but prices are still relatively high price per m2. Just like real estate prices in the USA in 2010-2012ish, prices will simply never go back to those levels again. That was the bottom.

I'm speaking about real estate. I'm not expert in other types of distressed assets in Argentina. Just out of curiosity, what do you believe Reply Guy the "distressed assets" that might be at bargain basement 2002 type prices?

Never say never

 

[earlyretirement]

Personally, I think the whole world is in for a wild ride, and possibly Armageddon. There's no telling what happens next.

For sure I agree with you that there can be a lot of challenges coming ahead globally. Things are very fragile and seeing how fast banks like SVB fell apart and the FDIC taking drastic actions is a good sign of that.

Still, I doubt we will see assets like real estate going down to 2002 levels type levels in Argentina. Remember, locals use real estate as piggy banks in Argentina. It's the one relatively stable investment. I will stand by my opinion that real estate won't fall to those levels.