Peru: Exports suffer biggest drop in five years and trade balance registers sixth consecutive deficit in August
October 6, 2014
In August, the trade balance registered a deficit of USD 311 million, which contrasted the USD 192 million surplus observed in the same month last year. August’s result was not as large as the USD 395 million deficit registered in July, but marked the sixth consecutive negative monthly balance.
Exports suffered even more significantly in August than in recent months, contracting 21.1% over the same month last year (July: -5.7% year-on-year). August’s result marked the biggest decline since July 2009. Meanwhile, imports decreased 9.4% in August, which followed July’s 5.0% fall and marked a nearly five-year low.
In the 12 months up to August, the trade balance posted an all-time record deficit of USD 2.1 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