Mexico: Trade deficit widens in June
July 27, 2018
Merchandise trade recorded a USD 0.9 billion deficit in June (May: USD 1.6 billion deficit), widening markedly from the USD 0.0 billion trade balance registered in June 2017. The result came in below analysts’ expectations of a narrower USD 0.2 billion deficit. Along with the wider trade deficit, export growth was subdued, expanding a tepid 5.5% year-on-year in June (May: +10.9% year-on-year). Shipments were soft on disappointing manufacturing exports despite solid U.S. manufacturing growth in the month—typically a reliable indicator. For their part, automotive exports were again relatively weak (June: +5.9% yoy; May: +5.4% yoy).
Import growth also eased in June, decelerating to 8.0% year-on-year (May: +11.5% yoy). That said, although the country’s imported energy bill continued to rise, among non-oil goods, import demand was mixed. Non-oil consumer imports—a proxy for domestic private consumption—posted a rare decline from the same month a year earlier, while non-oil intermediate imports—which are closely linked with manufacturing activity—also slowed moderately. On the other hand, imports of capital goods—a proxy for investment—accelerated modestly in June.
The 12-month trailing trade deficit increased to USD 12.4 billion in June from USD 11.5 billion in May, considerably wider than the USD 9.1 billion deficit recorded in June 2017.