Mexico: Trade deficit and overall trend improve in August
September 27, 2016
Mexico’s trade shortfall totaled USD 1.9 billion in August, which followed a similar deficit in July (USD 1.8 billion) and marked an improvement over the USD 2.8 billion shortfall registered in the same month last year. The result also overshot the USD 2.4 billion deficit the markets had expected. Due to the better-than-expected result, the 12-month rolling deficit came in at USD 16.1 billion in August, which marks the smallest accumulated trade shortfall in six months.
August’s better-than-expected trade balance was the result of a 4.5% annual expansion in exports, which contrasted an 8.9% decrease in July. Imports increased 1.5% in August, which also contrasted a 9.9% decrease in July. Analysts suggest that overseas sales likely benefited from an increase in demand from the U.S. as well as from the recent depreciation of the Mexican peso, which makes Mexican shipments abroad more competitive.
Author: Ricardo Aceves, Senior Economist