Mexico Trade June 2018


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.

Panelists surveyed for this month’s LatinFocus report expect exports to reach USD 437 billion in 2018, which would represent a 6.8% expansion compared to the previous year. Meanwhile, imports are expected to grow 6.5% and reach USD 448 billion. For 2019, the panel expects exports to expand 5.4% and imports to expand 5.5%.


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Mexico Trade Chart

Mexico Trade12m June 2018 0

Note: 12-month sum of trade balance in USD billion and annual variation of the 12-month sum of exports and imports in %.
Source: Mexico National Statistics Institute (INEGI)

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