Argentina: Exports and imports plummet in July
August 22, 2014
In July, exports declined 9.1% over the same month last year (July 2013: -3.4% year-on-year), which followed the 2.6% drop recorded in June. The print mostly reflected that steep declines in shipments of fuel and energy as well as of manufactured products more than offset higher exports of soybeans.
A month-on-month comparison corroborates the sizeable deterioration suggested by the annual figures. Exports tumbled 6.4% on a seasonally-adjusted basis in July, which contrasted the 9.9% increase recorded in the previous month.
Imports dropped 15.7% annually in July (July 2013: +10.7% yoy), which followed the 5.7% contraction observed in June. As a result, the trade surplus reached USD 803 million, which was up from the USD 376 million recorded in July 2013 and represented the lowest surplus in four months. That said, this was smaller than the USD 1.4 million surplus recorded in June of this year but exceeded the USD 758 million surplus that market analysts had expected. In the 12 months up to July, the trade balance posted an accumulated USD 7.0 billion surplus (June: USD 6.5 billion).
According to analysts, Argentinean trade has been heavily damaged by tough government import restrictions, weaker demand from Brazil—the country’s top trading partner—and high inflation, which is dampening the country’s competitiveness. In addition, farmers continue to hoard grains and soybeans to hedge against the weak peso. The country, which has had no access to international capital markets since defaulting in 2001, depends heavily on commodity exports to draw the foreign exchange reserves required to fulfill its debt obligations.