Argentina’s new president, Mauricio Macri has ended four years of currency restrictions, devalued its currency, and unshackled its import and export trade, opening the door to substantial growth in the oil and gas-rich country. On the first day of the new currency float system in December, the peso was down about 40 percent against the dollar, boding well for exports, and blocking many imports.

The International Monetary Fund has commented that the Macri administration “has initiated an important transition to correct macro-economic imbalances and micro-economic distortions,” to improve growth prospects in the mid-term. While short-term growth may be barely positive, as the economy adjusts to the relaxed currency regulations, growth should recover.

HSBC predicts that potential growth in GDP for 2017 could reach 3.5 percent. The bank also noted, just prior to the November election, that their “Trade Confidence Score in Argentina has moved to 110 from 99 previously, an increase that represents a shift from contraction to expansion territory. The main factor behind the improvement was the better expectations for volume of trade over the next six months, with 45 percent of the companies expecting volumes to increase.”

One significant impact these changes should make on the Argentine economy is that long-stifled domestic and foreign investment capital should return to the country. In Davos, Macri announced a 2016 foreign investment target of $20 billion, citing commitments already made for “hundreds of millions each” by a handful of multinational companies, including Dow Chemical.

Among sectors in which new investment could focus is the paint and coatings sector, facilitated by Argentina’s ability to domestically source petroleum derivatives. Architectural, automotive and industrial paints and coatings could show gains in both production and demand. A 2015 study by Agnelo Editora, based in Brazil, suggested that the paint and coatings market in the Southern Cone countries – Argentina, Brazil, Chile and Uruguay – will cumulatively grow by six percent per year through 2018. Within Latin America, Argentina represents about 10 percent of the total market.
Until now, Argentina has been a net gas exporter, but expectations are that the country’s industrial use of gas will rise sharply. In January, Argentina’s YPF SA and American Energy Partners LP, agreed in January to jointly explore and develop $500 million worth of oil and gas in the  Vaca Muerta or “dead cow” shale formation, in the Patagonian Province of Neuquén.

In November, Fabián Gil, the new president of Dow Latin America as of January, suggested that Argentina’s Bahia Blanca complex could become Dow’s third major polyethylene project, globally. Platts cited Gil’s speech during a recent APLA meeting, saying “Bahia Blanca is a hub where all the gas that goes in can be consumed,” and added that “Bahia Blanca is an opportunity because of its location in the southern tip of Buenos Aires where pipelines go through.” Apart from potential new production facilities there, Dow would also establish a research and development technology center there, Gil was quoted saying.

Gil, who was educated in Argentina, is now responsible for 25 Dow production facilities across Latin American, along with 16 R&D centers and a dozen other offices, employing some 5,400 workers. Dow’s Brazil Internet site lists 13 pages of construction sector products alone, many of which are utilized by the paint and coatings industry.