Argentina Trade


Argentina: Trade balance surplus increases in August on record fall in imports

September 23, 2014

In August, exports declined 11.7% over the same month last year (August 2013: -0.1% year-on-year), which followed the 9.1% drop recorded in July. The print mostly reflected sharp declines in shipments of fuel and energy as well as of manufactured products.

A month-on-month comparison does not corroborate the sizeable deterioration suggested by the annual figures. Exports fell 2.9% on a seasonally-adjusted basis in August, which was up from the 7.1% contraction recorded in the previous month.

Imports tumbled at the fastest pace since October 2009, falling 19.8% annually in August (August 2013: +13.2% yoy), which followed the 15.7% contraction observed in July. As a result of the steep fall in imports, the trade surplus reached USD 899 million, which was markedly up from the USD 367 million recorded in August 2013. In addition, this was larger than the USD 803 million surplus recorded in July of this year and exceeded the USD 575 million surplus that market analysts had expected. In the 12 months up to August, the trade balance posted an accumulated USD 7.5 billion surplus (July: USD 7.0 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, low global grain prices and high inflation, which is dampening the country’s competitiveness. 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.

LatinFocus Consensus Forecast panelists expect that exports will drop 1.6% in 2014, while imports will contract 4.9%, thus pushing the trade surplus to USD 10.4 billion. For 2015, the panel expects exports to grow 3.4% and imports to expand 3.9%, while the trade surplus will remain broadly unchanged at USD 10.5 billion.

Author: Ricard Torné, Lead Economist

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Argentina Trade Chart

Argentina Trade12m August 2014

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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