Entrepreneurs are getting ready for a year of increased turnover, but decreased profitability

2023 VISTAGE Argentina Business Confidence Index: Private Sector Faces Unfavorable Profitability Prognosis, High Inflation Expected

The latest VISTAGE Argentina Business Confidence Index shows that the private sector is facing an unfavorable scenario for profitability in the coming year. This index has been prepared since 2006, and the study corresponding to the fourth and last quarter of 2023 included 355 businesspeople CEOs, senior executives, and business owners who gave their opinion on the current economic scenario in Argentina and the future of their organizations.

The measurement revealed that 83% of participants considered that the economy had worsened compared to a year ago, while only 13% believed it had remained unchanged. Furthermore, 4% thought it had improved. Looking ahead to the next 12 months, half of those surveyed (50%) expected things to get worse, while 37% believed they would improve and 13% saw no changes.

Regarding investment in fixed assets for next year, 47% thought it would remain the same, while 31% predicted it would decrease and only 22% expected an increase. With high inflation involved, most participants (44%) expected their company’s turnover to grow in the next year; however, there were also those who predicted a decrease (32%) or no change (24%).

In terms of units sold in the next year, a majority of business leaders estimated that they would decrease by about one-third (43%), but others believed they would increase by around a third (31%) or remain unchanged (26%).

One aspect that stands out from this study is profitability expectations for companies in Argentina. Over half of respondents (55%) predicted that profitability will fall over the next twelve months. For approximately one-fourth of respondents (26%), it will remain unchanged; however, nearly twenty percent believe it will increase. On average, participants predict an annual inflation rate of over three hundred percent by January

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