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ARGENTINA – Strong trade surplus in July

August 25, 2020

Trade surplus widened in July, on weak imports.

Trade surplus widened in July, on weak imports. The trade balance showed a surplus of USD 1.5 billion surplus in July, up from a surplus of USD 1.0 billion a year earlier and above our forecast of USD 1.1 billion. The 12-month trade surplus increased to USD 19.0 billion. At the margin, the seasonally-adjusted annualized surplus for the quarter ended in July was USD 17.1 billion, vs. USD 16.5 billion in the previous quarter.
 
A decline in sales of industrial exports drove total exports down. Total exports decreased by 13.9% yoy in the quarter ended in July. On a sequential basis, exports fell by 12.0% qoq/saar (from -39.5% in 2Q20). Exports of industrial products plummeted by 43.8% yoy in the period, from a 52.4% yoy decline in 2Q20, still affected by a steep fall in car exports. Agricultural exports, including manufactured products, increased by 0.2% yoy, on weak soy pellet exports. 
 
Imports continued to contract. Total imports declined by 27.9% yoy in the quarter ended in July, and 23.1% qoq/saar (from -46.4% drop in 2Q20). Purchases of capital goods and parts plummeted by 37.6% yoy in the period, in line with subdued investment. Imports of intermediate goods declined by 12.3%, followed by a 22.6% yoy drop in consumer goods imports (including cars).
 
The rolling 12-month energy trade balance posted a small surplus. The annual energy trade surplus reached USD 310 million in July, up from a surplus of USD 83 million in the previous month, mostly due to the 54.6% yoy decline in oil and gas imports. Exports dropped by 29.3% yoy in the period.
 
We forecast a surplus of USD 17.5 billion this year, up from USD 16.0 billion in 2019, due to weak activity and import restrictions.



Juan Carlos Barboza
Diego Ciongo

 



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