President Mauricio Macri considered that the most important part of his trip to New York was his meeting with influential financial figures from Wall Street, as his government struggles to find new investors to jumpstart the country’s economy. And one of the biggest firms in the world allowed him to deliver encouraging news on his economic promises, as US industrial conglomerate General Electric vowed to invest US$10 billion in the country over the next decade.

The roadshow through New York to promote Argentina as a profitable investment destination also included a presentation from Finance Minister Alfonso Prat-Gay, who said that Argentina expects to issue between US$10 billion and US$15 billion in international debt next year.

Macri’s government has focused on attracting investment and reconciling Argentina with global capital markets since he took office in December, closing a bitter chapter following a US$100 billion default in 2002, the largest ever at the time.

Prat-Gay said at the event in New York that Argentina would likely post non-negative growth in the third quarter for the first time in five quarters. He said annual inflation could end the quarter at 17 percent, the government’s target for all of 2017.

“If inflation in September stays at what private consultants are estimating, one percent or 1.2 percent, that will mean the third quarter will end up at an annual inflation rate that is already at our target for next year,” Prat-Gay said.

Consumer price gains slowed drastically in greater Buenos Aires in August, to 0.2 percent from 2.0 percent in July. Recession is helping to keep a lid on consumer prices, as is a court ruling that forced the government to restore home heating gas subsidies until public hearings could be held.

Macri also promised that inflation, a long-time nightmare for Argentines, would continue to fall.

“We will see single-digit inflation in two years’ time,” he said at the event, hosted by the Financial Times newspaper.

Macri said he had seen evidence a tax amnesty covering undeclared assets would be successful. The government expects the amnesty could provide as much as US$80 billion to kickstart the economy, though Macri did not say how much had been collected so far.

“I think we will have great success in this ... but there are many (people with money overseas) here, so you will have to ask them,” Macri said, eliciting laughs from the audience

Investment details

General Electric’s promise was made by Vice Chairman John Rice, turning GE into the latest foreign company to announce new plans since Macri took office.

GE has already invested US$1.2 billion alongside local partners and customers in the past four months, the company said in a statement, including US$900 million to build thermal power plants and a US$280 million loan to state-run airline Aerolineas Argentinas to finance the purchase of seven airplanes.

Nearly 2,000 executives from dozens of countries attended a government-sponsored forum in Buenos Aires last week aimed at building confidence businesses need to invest in the country.

At the forum, German engineering group Siemens said it would help create investment and provide financing for US$5.6 billion in infrastructure projects, including gas-fired power plants.

GE said its investment will help build seven power plants that will add around one gigawatt to the country’s electric system. The figure includes the US$350 million GE has already decided to invest along with state-controlled oil company YPF to build plants in the Neuquén and Tucumán provinces.

Business generally speaks enthusiastically about Macri’s policies, but many are hesitant to invest because of Argentina’s history of political volatility, as well as its current struggles with a fiscal deficit, recession and more.

“When we saw the Argentinian people elect President Macri, and we looked at the leadership team that he assembled, we saw a real tipping point,” Rice said.

Date: September 20, 2016