Argentina: Exports moderate in December
January 23, 2012
In December, exports rose 13.9% over the same month the year before, which was below the 17.2% expansion seen in November and marked the slowest pace since April 2011. A month-on-month comparison provides an even bleaker picture compared to the annual figures, as exports contracted 4.1% on a seasonally adjusted basis, following on from a 5.3% drop in November. Exports continue to decline on the back of slower demand from Argentina's main trade partners, in particular Brazil. In addition, the drought which affected Argentina at the end of 2011 is expected to take a heavy toll on the soy and corn harvests, two of the country main export crops, and thus further reduce export revenues going forward. Imports, meanwhile, grew 11.1% annually in December, which was only slightly below the 11.9% expansion registered in November. Amid strong imports and slowing exports, the trade surplus narrowed from USD 684 million in November to USD 280 million in December, the lowest monthly result seen in a year. On a full year basis, the trade surplus narrowed from the USD 11.6 billion recorded in 2010 to USD 10.3 billion. According to analysts, the shrinking trade surplus mainly stems from the continued rise in fuel imports, as Argentina has become a net energy importer in recent years. Against this backdrop, economic authorities are therefore stepping up measures to curb the increase in imports. As of 1 February 2012, importers seeking to buy goods abroad will be forced to get prior approval from the national tax agency (AFIP, Administracion Federal de Ingresos Publicos).
Author: Armando Ciccarelli, Head of Data Solutions