Itaú BBA - ARGENTINA – Trade surplus fell again in October

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ARGENTINA – Trade surplus fell again in October

November 24, 2020

We recently revised our trade surplus forecast down to USD 15.0 billion

The trade surplus narrowed significantly in October, on weaker exports and higher imports. The trade balance showed a surplus of USD 0.6 billion in October, down from a surplus of USD 1.8 billion a year earlier and below the market consensus according to Bloomberg of a surplus of USD 0.7 billion.  The 12-month trade surplus decreased to USD 16.9 billion. At the margin, the seasonally-adjusted annualized surplus for the quarter ended in October fell to USD 11.0 billion, from USD 13.6 billion in 3Q20.


Exports declined on a year-over-year basis during the quarter ended in October. Total exports decreased by 17.1% yoy in the period, but they showed a modest increase at the margin. On a sequential basis, exports grew 2.2% qoq/saar in October. Exports of industrial products contracted by 23.6% yoy in the quarter ended in October, from a decline of 26.4% yoy in 3Q20, still driven by plummeting car exports. Agricultural exports, including manufactured products, fell by 12.0% yoy, following a 4.7% decline in 3Q20.

Imports posted a year-over-year contraction during the quarter ended in October, but a strong rebound on a sequential basis. Total imports declined by 7.0% yoy in the quarter, but increased by a hefty 76.0% qoq/saar, in line with the sequential recovery of activity. Purchases of capital goods and parts fell by 17.3% yoy during the period, tracking the drop in private investment. 

The energy trade balance posted a modest surplus. The rolling 12-month surplus ended October at USD 339 million, up from a deficit of USD 136 million in December 2019, driven by a reduction of oil and gas imports that more than offset the decline in exports.

We recently revised our trade surplus forecast down to USD 15.0 billion. The reopening of the economy coupled with a strong official exchange rate is likely behind the poorer trade results.

Juan Carlos Barboza
Diego Ciongo


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