Argentina: Trade balance surplus narrows in September
October 24, 2014
In September, exports decreased 12.1% over the same month last year, which followed the 11.7% contraction recorded in August. The print mostly reflected sharp declines in exports of manufactures and primary products.
On a monthly basis, exports fell 3.0% in seasonally-adjusted terms in September, which was slightly down from the 2.9% decline recorded in the previous month.
Imports fell 8.4% annually in September, which was a much less pronounced contraction than the 19.8% decline observed in August. In fact, August’s fall marked the steepest contraction in imports since October 2009. The trade surplus totaled USD 404 million in September, which was down markedly from the USD 716 million surplus recorded in September 2013. In addition, September’s result was significantly lower than the USD 899 million surplus recorded in the previous month and undershot the USD 533 million surplus that the market had expected. In the 12 months up to September, the trade balance posted an accumulated USD 7.2 billion surplus (August: USD 7.5 billion surplus).
According to analysts, Argentinean external trade has been heavily damaged by tough government import restrictions, weaker demand from Brazil—the country’s top trading partner—low commodity prices, and high inflation, all of which are hampering the country’s competitiveness. Argentina has had no access to international financial markets since the default in 2001 and therefore it depends heavily on commodity exports to draw the foreign exchange reserves required to fulfill its debt obligations.
Author: Cecilia Simkievich, Economist