Peru: Exports fall at staggering rate and trade balance registers another deficit in February
April 10, 2015
In February, the trade balance registered a USD 245 million deficit, which contrasted the USD 361 million surplus observed in the same month of last year. February’s deficit was smaller than the USD 337 million shortfall registered in January.
Exports suffered another significant drop in February, contracting 22.9% over the same month of last year (January: -11.3% year-on-year). This marked the biggest contraction in nearly six years. Exports have posted an annual expansion in only two months during the past two years. Meanwhile, imports fell 5.3% in February, which was up from the 13.0% contraction in January.
In the 12 months up to February, the trade balance posted a deficit of USD 1.7 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