Itaú BBA - ARGENTINA – Trade surplus widened in 2Q20

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ARGENTINA – Trade surplus widened in 2Q20

July 28, 2020

Hefty contraction of imports in 2Q20.

Trade surplus widened in 2Q20, on falling imports, despite the decline in exports. The trade balance showed a USD 1.5 billion surplus in June, up from a USD 1.1 billion surplus a year earlier and in line with our forecast. As a result, the 12-month trade surplus reached USD 18.5 billion. At the margin, the annualized surplus adjusted for seasonality in 2Q20 was USD 17.0 billion, vs. USD 16.9 billion in the previous quarter.

Exports declined in 2Q20, due to lower sales of industrial products. Total exports decreased by 14.7% yoy. On a sequential basis, exports fell by 38.1% qoq/saar (from -43.9% in 1Q20). Exports of industrial products plummeted by 52.4% yoy in the period, from an 11.9% yoy decline in 1Q20, affected by a steep decline in car and biodiesel sales due to lower demand from Brazil and Europe. Agricultural exports, including manufactured products, increased by 4.7% yoy in 2Q20, on higher sales of soy and derivatives as well as the recovery in cereal exports.  

Hefty contraction of imports in 2Q20. Total imports declined by 27.7% yoy in the second quarter, consistent with the contraction in internal demand. At the margin, imports declined by 50.0% qoq/saar, from a 9.9% drop in 1Q20. With the collapse of investment, purchases of capital goods and parts plummeted by 37.8% yoy in 2Q20, followed by a drop of 11.5% in the import of intermediate goods (-14.3%). Finally, consumer goods imports (including cars) dropped by 23.8% yoy in the period. 

The energy trade balance posted its first rolling 12-month surplus since April 2011. The energy trade surplus reached USD 55 million in 2Q20, up from a deficit of USD 0.3 billion, mostly due to the 52.3% yoy decline in oil and gas imports. Exports dropped by 34% yoy in the period.

We forecast a surplus of USD 17.5 billion this year, due to weak activity and import controls.


Juan Carlos Barboza
Diego Ciongo



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