Mexico: Merchandise trade deficit widens in May
June 27, 2018
Merchandise trade recorded a USD 1.6 billion deficit in May, widening notably from the USD 1.2 billion deficit registered in May 2017 and also the USD 289 million deficit registered in April. The result disappointed market analysts who had expected a smaller USD 900 million deficit. Despite the wider trade deficit, export growth was relatively solid, expanding 10.9% over the same month a year prior in May (April: +17.0% year-on-year). The softer exports print was the result of notably weaker manufacturing exports (May: +7.8% yoy; April: +14.9% yoy), held back by tepid automotive exports, which eased out of double-digit growth (May: +5.5% yoy; April: +19.9% yoy).
Meanwhile, import growth also softened in May, decelerating to 11.5% in annual terms from April’s almost seven-year high of 21.4%. Among non-oil goods, the moderation in import growth was broad-based in May. Non-oil consumer imports—a proxy for domestic private consumption—came to a near halt. Non-oil intermediate imports—which are closely linked with manufacturing activity—also slowed considerably. Similarly, imports of capital goods—a proxy for investment—weakened in May.
The 12-month trailing trade deficit increased to USD 11.5 billion in May from USD 11.2 billion in April, considerably larger than the USD 9.7 billion deficit recorded in May 2017.