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ARGENTINA – Stronger-than-expected trade surplus in August

September 24, 2020

Imports continued to contract as internal demand remained weak

Trade surplus widened in August, on weak imports. The trade balance showed a surplus of USD 1.4 billion in August, up from a surplus of USD 1.2 billion a year earlier and above the market consensus of USD 1.2 billion according to Bloomberg. The 12-month trade surplus increased slightly, to USD 19.2 billion. At the margin, the seasonally-adjusted annualized surplus for the quarter ended in August remained unchanged at USD 17.1 billion compared to July.
 
Broad-based decline in exports on a year-over-year basis for the quarter ended in August. Total exports decreased by 12.2% yoy in the period, but increased at the margin. On a sequential basis, exports grew 12.5% qoq/saar (from -38.8% in 2Q20). Exports of industrial products contracted by 35.0% yoy in the period, from a 52.4% yoy contraction in 2Q20, driven by a steep decline in car exports. Agricultural exports, including manufactured products, decreased by 0.9% yoy.
 
Imports continued to contract as internal demand remained weak. Total imports declined by 23.9% yoy in the quarter ended in August, but gained 10.2% qoq/saar (from -47.2% in 2Q20). Purchases of capital goods and parts plummeted by 34.3% yoy in the period, in line with reduced investment expenditures. Consumer goods imports (including cars) decreased by 17.2% yoy, followed by an 8.8% decline in imports of intermediate goods.
 
The incipient surplus in the energy trade balance expanded. The rolling 12-month surplus reached USD 423 million in August, up from a surplus of USD 83 million in June, driven by a 48.1% yoy decline in oil and gas imports in August, partially offset by a 30.3% drop in exports.
 
We forecast a surplus of USD 17.5 billion for 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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