Mexico: Trade deficit widens as exports decline in May
July 10, 2013
In May, the trade balance recorded a deficit of USD 470 million. The reading contrasts the USD 334 million surplus registered in the same month last year and exceeded market expectations that saw a trade shortfall of USD 309 million. Building on the monthly reading, the moving 12-month sum of the trade balance dropped from a USD 4.4 billion deficit in April to a USD 5.2 billion shortfall in May, which represents the largest deficit since November 2009.
The May deficit reflects a 1.5% expansion in imports, which, nevertheless, was slower than the whopping 11.8% increase observed in April. The monthly rise was the result of an increase in imports of intermediate goods, whereas imports of consumer and capital goods deteriorated. As a result, the moving 12-month sum of imports fell from a 3.8% increase in April to a 3.3% rise in May.
Meanwhile, exports declined 0.9% annually in May, which contrasts the 6.3% expansion registered in April. The monthly deterioration showed how a sharp drop in oil exports more than offset an increase in non-oil shipments. As a result of the monthly deterioration, in the 12 months up to May export growth slowed to a 2.4% expansion from a 3.1% increase in the 12 months up to April.
LatinFocus Consensus Forecast panellists expect export growth accelerating in the months ahead and reaching a 6.1% expansion and imports rising a stronger 7.6%. For next year, the panel expects both exports and imports to accelerate, growing 8.2% and 8.8% respectively.
Author: Ricardo Aceves, Senior Economist