Sun, Nov 12, 2017 - Page 16 News List

VW to invest in Argentina


German automaker Volkswagen AG (VW) on Friday announced a plan to invest US$650 million in an Argentina plant where it is to manufacture a new sport utility vehicle (SUV), a statement released by the government said.

Business-friendly Argentine President Mauricio Macri, who ushered the country out of recession last year, has encouraged foreign investment, especially after his center-right coalition’s wins in last month’s midterm elections.

Production of the SUV is anticipated to begin in 2020.

In a televised statement, Macri noted that one year ago the government, companies and unions agreed to produce 1 million cars per year.

The president stressed that this year Argentina has sold more than 780,000 cars, with record sales of trucks, “which means production is moving, construction is moving.”

Automotive factories produced nearly 393,650 units from January to last month, 2.1 percent more than in the same period last year, Argentina’s Association of Automotive Factories said.

In those 10 months, the sector commercialized 714,864 vehicles with a year-on-year increase of 21.8 percent in total sales, it said.

The IMF on Friday urged the country to accelerate the good work it is doing on reforms.

An IMF team in Buenos Aires just concluded its annual review of the nation’s economy and said the efforts of Macri’s nearly two-year-old government to transform the economy has yielded “significant” gains.

“These, and other policy changes, have resulted in a steady recovery from the recession that began in mid-2015,” IMF mission chief Roberto Cardarelli said in a statement.

The IMF forecasts growth to recover to 2.75 percent this year and 2.5 percent next year, after contracting 2.2 percent last year.

However, it warned that inflation, which was expected to decline, “remains stubbornly high,” and the deficit has caused an increase in foreign borrowing. Together that has put “upward pressure on the real exchange rate.”

“These factors pose vulnerabilities to the medium-term outlook,” Cardarelli said.

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