By Jorge Otaola

BUENOS AIRES (Reuters) - Banco Galicia, Argentina's largest domestic private bank by loans and deposits, plans to double its investments this year amid an expected reduction in inflation and return to economic growth, its top executive said.

The company will spend more than 2.5 billion pesos ($182 million) in 2016 to open branches, move its headquarters and incorporate new technology, compared to 1.3 billion pesos invested last year, Chief Executive Fabian Kon said in an interview.

Argentina's business community has praised President Mauricio Macri's efforts to cut spending and end the country's isolation from capital markets, but he is still struggling with one of the world's highest inflation rates and negative growth seven months into his term.

"This is a year of transition, of macroeconomic readjustment without large growth in real terms but with very promising prospects for 2017," Kon said on Tuesday.

"Given the macro-economic conditions, we plan to grow in all sectors, though in the medium term companies may demand more loans than consumers to start an investment phase that was basically absent in recent years," he said.

Kon said he expected inflation to start falling month by month in June, something necessary for the bank to make longer term loans beyond those providing very short-term credit lines.

Macri closed the Indec statistics agency shortly after taking office to revamp its methodology, and the government said last week that May inflation was higher than market expectations at 4.2 percent.

As Argentina's ratio of deposits and loans to gross domestic product remains low in comparison to other countries, banks see a large potential to expand.

Kon did not rule out potential acquisitions of other banks and said any corporate debt issuance would be long-term and in dollars.

The bank, formally known as Banco de Galicia y Buenos Aires SA and controlled by conglomerate Grupo Financiero Galicia S.A. <GFG.BA>, had as of late March some 3.3 million clients and deposits of 107.8 billion pesos.

(Writing by Caroline Stauffer; Editing by Alistair Bell)