Peru: Exports drop again and trade balance registers fifth consecutive deficit in July
September 5, 2014
In July, the trade balance registered a deficit of USD 574 million, which was larger than the USD 393 million shortfall observed in the same month last year. July’s result more than doubled the USD 242 million deficit registered in June and marked the fifth consecutive negative monthly balance.
Exports continued to suffer in July, contracting 11.2% over the same month last year (June: -7.5% year-on-year). Meanwhile, imports decreased 5.2% in July, which contrasted June’s 2.1% increase.
In the 12 months up to July, the trade balance posted an all-time record deficit of USD 1.8 billion. The trade balance had peaked at a record-high surplus of USD 9.8 billion in February 2012, but has narrowed uninterruptedly since then and shifted to deficit in December 2013. This trend has been driven due to falling international demand and prices for traditional Peruvian exports, such as copper, silver and natural gas. Similarly, the increase in import volumes has also affected the trade balance negatively.
Author: Carl Kelly, Economist