Argentina: Exports drop at fastest pace in five years
December 22, 2014
In November, exports tumbled 20.1% over the same month last year and followed the 16.5% decrease tallied in October. The decline in November was broad-based, with the exception of exports of primary products, which increased notably compared to the same month last year. On a monthly basis, exports fell 2.6% in seasonally-adjusted terms in November, which was down from the 0.9% decline recorded in the previous month.
Imports fell 18.5% annually in November. The contraction followed the 14.4% drop registered in October. Fuels was the only category that did not record a contraction in November, while automobiles saw the largest decrease. The trade surplus totaled USD 461 million in November, marking a notable deterioration from the USD 697 million surplus recorded in November 2013. However, November’s trade balance came in above the USD 361 million surplus recorded in October and overshot the USD 456 million surplus that the market had expected. In the 12 months up to October, the trade balance posted an accumulated USD 6.7 billion surplus, which was below October’s USD 7.0 billion.
According to analysts, Argentinean imports have been heavily damaged by tough government import restrictions and weaker domestic demand. Exports have also fallen rapidly due to the slowdown in Brazil and China—two of Argentina’s top trading partners—Argentina depends heavily on its exports to draw the foreign exchange reserves required to fulfill its debt obligations as the country has had no access to international financial markets since defaulting in 2001.
Author: Cecilia Simkievich, Economist