The trade balance showed a deficit of USD 1.7 billion in June, up from a USD 0.2 billion deficit in the same month of 2022. The deficit was greater-than-expected, with analysts surveyed by Reuters estimating a deficit of USD 0.5 billion, and our forecast of a USD 1.0 billion deficit. The 12-month rolling trade balance entered negative territory with a deficit of USD 0.4 billion in June, from a surplus of USD 4.2 billion in March. At the margin, the seasonally-adjusted annualized balance showed a deficit of USD 13.0 billion in 2Q23 (from a deficit of USD 4.7 billion in 1Q23).
Exports declined in 2Q23, affected by the severe drought. Total exports declined by 29.6% YoY in the quarter, after a drop of 17.9% in 1Q23. Agricultural exports, including manufactured agricultural products, plummeted by 36.4% YoY in the quarter (from a drop of 26.1% yoy in 1Q23), led by a drought-related reduction in exports of wheat, corn and soybean oil. Exports of other industrial products fell by 16.2% yoy in the period (from a decline of 4.3% in 1Q23), mostly due to smaller shipments of biodiesel. On a sequential basis, exports fell by 27.1% qoq/saar in June, contracting less than the -51.1% of 1Q23.
Imports also declined in 2Q23, due to controls and weak activity, but at a slower pace than exports. Total imports fell by 11.9% YoY in 2Q23 (from -4.0% YoY in 1Q23), but rose by 15.7% qoq/saar in the period (similar to the increase of 15.8% registered in 1Q23). Imports of consumer goods (including cars) dropped by 2.5% YoY in the period, while imports of capital goods and parts decreased by 2.7% YoY. Imports of intermediate goods fell by 6.4% YoY in the period.
The energy trade deficit narrowed. The rolling 12-month deficit narrowed to USD 3.0 billion in June, from USD 4.9 billion in December 2022. Energy imports decreased by 42.3% yoy in 2Q23, while oil exports fell by 47.0% yoy in the period.
We recently revised our trade balance forecast down to a surplus of USD 1.0 billion for this year, due to the worse-than-expected deterioration of the external accounts.