The announcement of tariff measures by the Trump Administration (U.S.), the doubts generated by this policy, and economic uncertainty have caused changes in the mid-market outlook for the next 12 months. However, not all regions were affected in the same way.
According to the latest data from Grant Thornton's International Business Report (IBR), globally, optimism reached 73% of business leaders in the first quarter of 2025, compared to 76% in the last quarter of 2024. In South America, only 63% feel optimistic about next year, the lowest percentage since the first half of 2023 (65%).
In Argentina, the mid-market maintains its level of expectation stable and in the last quarter optimism increased from 72% to 75%. “Contrary to what we saw in the fourth quarter of 2024, the increase in optimism was mainly influenced by expectations of future business growth, and to a lesser extent by the perception of trade limitations,” explains Fernando Fucci, Managing Partner at Grant Thornton Argentina.
National mid-market sees domestic trade favourably for the next 12 months: 69% expect an increase in their income (+3 percentage points) and 49%, in their profitability (+4 percentage points). Compared to the previous quarter, 5% less mid-market leaders expect to increase exports (19%), and 20% less expect an increase in revenue from foreign markets. However, 13% of companies expect an increase in employees focused on foreign markets, 2 percentage points (pp) more than the last quarter of 2024.
"It is possible that the increase in employees focused on foreign markets is due more to an import-related issue than an export-related one, and/or a medium-term strategic need to conquer new markets. The IBR showed a 6-percentage point increase in the number of companies that plan to have foreign suppliers and subcontractors," Fucci clarifies.
When analysing key business constraints, the largest increases were in the size of the market (+10pp) and in future demand shortages (+12pp); while the highest decreases were in the index that considers the regulatory environment as a constraint (-13pp) and the index that considers energy costs as a constraint for business development (-13pp).
Starting in the second half of 2023, in addition to the questions posed to all respondents in more than 150 economies, the IBR includes three specific questions for Argentine executives. They refer to issues specific to our context:
Although the inflation rate remains the most influential factor, fewer business leaders point to it as a decisive factor: in the first quarter of 2025, 43% of respondents cited it, down 29.5% from the last quarter of 2024. Meanwhile, monetary exchange rate grew 11 percentage points (pp) influencing the decisions of 26% of middle-market business owners, followed by financial interest (14%, +3pp) and the wage increase rates required by industry (9%, +6pp). The target profit margin decreased 1pp to 8%.
Which strategies are you currently using to attract and retain talent?
Despite falling 3pp, more than half of mid-market business leaders (53%) offer training and career development as part of their talent attraction and retention strategies. Employee benefit programs also had a slight drop and in the first quarter of 2025 only 10% of companies plan to offer them (-2pp), making it the least used strategy.
Offering extra leave or free time continues to be chosen by 16% of employers; while 32% offer monetary rewards linked to employee performance (+3 percentage points).
Offering above-market salaries and improved health and mental health programs decreased 8 percentage points to 23% and 21% respectively.
In this case, 27% rely on the experience and know-how of leaders (+6pp) and the company's commercial success (-6pp). 23% do so on the financial stability of the firm in times of uncertainty (+3pp), while 21% bet on the value of the collective and know-how of the collaborators (-4pp).