Peru: Exports fall again and trade balance registers another deficit
March 6, 2015
In January, the trade balance registered a USD 317 million deficit, which was smaller than the USD 450 million shortfall observed in the same month of last year. January’s result contrasted the USD 208 million surplus registered in December.
Exports suffered another significant drop in January, contracting 10.1% over the same month of last year (December: -12.9% year-on-year). Exports have posted an annual expansion in only two months during the past two years. Meanwhile, imports plummeted from a 1.9% decline in December to a 12.5% contraction in January. This marked the biggest contraction in more than five years.
In the 12 months up to January, the trade balance posted a deficit of USD 1.3 billion. The trade balance peaked at a record-high surplus of USD 9.8 billion in February 2012. It has narrowed almost uninterruptedly since then and shifted to deficit in December 2013. This trend has been driven by falling global demand and decreasing prices for traditional Peruvian exports, such as copper, silver and natural gas. The increase in import volumes has also affected the trade balance negatively.
Author: Carl Kelly, Economist