Argentina Trade December 2017


Argentina: Trade balance records largest accumulated deficit on record

January 23, 2018

In December, exports contracted 2.4% in year-on-year terms, an improvement from the revised 4.2% contraction observed in November (previously reported: -4.9% year-on-year). December’s contraction reflected a double-digit drop in manufacture of agricultural products, which more than offset an expansion in the three remaining components of the index. In dollar terms, exports reached USD 4.5 billion, edging down from previous month’s USD 4.6 billion and the USD 4.6 billion recorded in the corresponding month of 2016.

Growth in imports moderated from a 30.2% annual expansion in November to 16.7% in December. The deceleration was driven by a sharp slowdown in the imports of capital goods, which expanded just 0.2%, down from the 30.2% expansion observed in November. In dollar terms, imports reached USD 5.4 billion, below the previous month’s USD 6.2 billion and above the USD 4.6 billion recorded in December 2016.

As exports contracted and imports expanded at a strong rate, the trade balance swung from a USD 33 million surplus in December 2016 to a USD 847 million deficit in December 2017 (November 2017: USD 1.5 billion deficit). For the year 2017, the trade balance posted an accumulated deficit of USD 8.5 billion, below the USD 7.6 billion deficit recorded in the 12 months up to November. The trade deficit in 2017 exceeded the previous record of USD 5.7 billion, established in 1994.

Panelists participating in the LatinFocus Consensus Forecast expect exports to expand 5.9% in 2018 and imports to increase 8.9%, pushing the trade balance to a USD 1.8 billion deficit. For 2019, the panel expects exports to increase 6.6% and imports to expand 7.7%, with a trade shortfall of USD 2.8 billion.

Author: Jean-Philippe Pourcelot, Economist

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Argentina Trade Chart

Argentina Trade12m December 2017 2

Note: 12-month sum of trade balance in USD billion and annual variation of the 12-month sum of exports and imports in %.
Source: Argentina National Statistical Institute (INDEC) and FocusEconomics calculations.

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