Mexico: Merchandise trade logs surprising deficit in April
May 25, 2018
Merchandise trade recorded a USD 289 million deficit in April, swinging from a revised USD 1.7 billion (previously reported: USD 1.9 billion) surplus recorded in March as imports soared. The print fell short of market projections of a USD 500 million surplus.
Despite the trade deficit, external demand sustained momentum in April as export growth expanded 17.0% in annual terms—the fastest pace in over six years—accelerating from the revised 10.0% (previously reported: +9.4% year-on-year) rise registered in March. The pick-up was driven by double-digit growth in manufacturing exports, which expanded 14.9% in April (March: +7.5% yoy), with auto exports delivering another robust performance (April: +19.9% yoy; March: +16.8% yoy).
Meanwhile, import growth also picked up steam in April, outpacing exports at 21.4% on an annual basis, which represented an almost seven year high and was a considerable pick-up from March’s tepid 4.5% expansion. The acceleration in import growth was across the board in April. Non-oil consumer imports—a proxy for domestic private consumption—ascended at a rapid clip. Non-oil intermediate imports—which are closely linked with manufacturing activity—also shored up. Similarly, capital imports, a proxy for investment, grew at over a quarter in April.
The 12-month trailing trade deficit widened to USD 11.2 billion in April from USD 10.0 billion in March, below the USD 8.9 billion deficit recorded in April 2017.
Author: Lindsey Ice, Economist