Peru: Exports tumble again, but trade deficit narrows in May on greater contraction of imports
July 5, 2015
In May, the trade balance registered a USD 231 million deficit, which was smaller than the USD 381 million shortfall observed in the same month of last year. May’s deficit was also much narrower than the USD 661 million shortfall registered in April.
Exports suffered another large decline in May, contracting 16.0% over the same month last year (April: -24.6% year-on-year). May’s contraction marks the sixth consecutive double-digit decline, although it was the least severe contraction since January. Meanwhile, imports fell 18.5% in May, which followed the 15.9% contraction in April and marked the biggest drop in more than five years.
In the 12 months up to April, the trade balance posted a deficit of USD 2.2 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 April 2014. 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