Argentina: Exports improve in February
April 16, 2012
In February, exports rose 12.8% over the same month last year, which was above the 9.6% expansion seen in January, when exports expanded at a single-digit pace for the first time since March 2010. A month-on-month comparison corroborates the acceleration suggested by the annual figures, as exports expanded 2.7% on a seasonally adjusted basis, which was up from the 1.9% rise observed in January. Imports, meanwhile, contracted 0.9% annually in February, which contrasted the 9.8% expansion recorded in January and represented the first drop since November 2009. The contraction reflects the impact of the measures recently taken by the government which aim at curbing import growth. As a result, the trade surplus widened to USD 1.3 billion in February, which more than doubled the USD 551 million surplus recorded in January and marked, in fact, the largest surplus since May last year. On 16 April, the government announced a decree to nationalise YPF, the local unit of Spanish energy group Repsol and the country's main oil producer. The bill, which will be likely approved by the Congress given the strong majority held by the ruling party in both houses, allows the Fernandez administration to expropriate 51% of YPF shares. Control will be split between the oil-producing provinces, which will hold 49% of the expropriated shares, and the central government, which will control the remaining stake. In recent months, the government has been putting pressure on oil producers in the country to boost production as, according to Argentinean authorities, lack of investment by oil companies has turned Argentina into a net energy importer in recent years. During March, various provincial governments had already revoked operating licenses held by YPF. In addition, at the end of the month, the southern province of Neuquen revoked concessions held by the local units of Brazil's Petrobras and Canada's Azabache Energy. Following the re-election in October, the trade surplus has been the main focus of the Fernandez administration. Since 1 February 2012, purchases from abroad need approval from the national tax agency (AFIP, Administracion Federal de Ingresos Publicos). A group of 14 countries - including the United States, the European Union and Mexico - issued a joint statement at the World Trade Organization (WTO) on 30 March, expressed concern regarding Argentina's protectionist stance and announced further action at the WTO if the country does not take immediate steps to reverse its policies.
Author: Armando Ciccarelli, Head of Data Solutions