A trade surplus of USD 1.5 billion was registered in February, below the Bloomberg median and our call of USD 2.1 billion. The February surplus was broadly in line with the print in the same month of 2023. As a result, the rolling one-year trade balance was USD 15.6 billion (4.7% of GDP; USD 15.5 billion). The annualized quarterly trade balance sits at USD 17.7 billion (SA). After a strong start to the year, exports contracted over one year in February, as the upside pull from copper diminished and the drag from lithium grew. On the other hand, imports also contracted in the month as the mild consumer and intermediate increase was more than offset by the large capital goods contraction (reflecting the weak investment dynamics in the economy).
Mining exports fell 1.2% YoY (+10.8% in January), as lithium was down by a third, while copper grew at a far lower rate of 3.8% (17.5% in January). Manufactured exports dropped by a milder 8.5% (14.6% fall in January), lifted by beverages, paper and a reduced decline of chemicals. Meanwhile, total imports contracted 4.8% YoY (+3.7% in January). Consumer goods purchases rose 0.3% (5.1% YoY in January), although durable continue to drop at a near double-digit rate. Energy imports (+16.5% YoY) lifted overall intermediate imports growth to 1.3% YoY (2.7% in January). The annual drop of capital goods imports increased to -28.7% (2.5% drop in January), dragged by weaker demand for machinery (related to mining, construction and other sectors; +26% YoY). Sequentially, imports continued weaken in the rolling-quarter. Exports grew 2.3% QoQ/Saar (-8.3% in 4Q23), led by mining at the start of the year. On the other hand, total imports dropped 11% MoM/SA (-4.3% in 4Q23) amid weakening capital goods dynamics
The large trade surplus in 2023 likely supported a swift narrowing of the CAD from 9.0% in 2022 to 2.9% last year. With private consumption expected to drive the economic recovery (of 1.7%) this year, given lower interest rate and inflation, along with still elevated oil prices to remain elevated, we expect some CAD widening to around 4% this year. Detailed information will be provided by the BCCh on March 18.
