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2024/07/08 | Andrés Pérez M., Vittorio Peretti & Ignacio Martinez Labra

A USD 1.9 billion trade surplus was recorded in June, above market expectations of USD 1.7 billion. Year-to-date, a trade surplus of USD 12 billion has been accumulated (USD 9.5 billion at the same point last year). Likewise, the rolling one-year trade balance rose to USD 17.8 billion (5% of GDP; USD 15.3 billion in 2023). The annualized trade balance during 2Q24 sits at USD 21 billion (SA). Total exports in the month fell by 1.4%(+3.7% in May), pulled down by manufacturing sales (-5.8%), while mining was up 1.1% (copper sales in nominal terms increased by 8%, lithium exports declined by 45% reflecting lower prices). Imports contracted 10.3% yoy (-6.5% in May) with widespread contractions among its components (consumer goods fell 8%; energy imports dropped 14%; while capital imports shrunk 11%).



Upbeat copper performance continued during 2Q24, while capital imports remained weak. Total exports increased 5.8% during 2Q24 (-12% in 1Q24). The mining increase of 12% (+2% in 1Q24), was somewhat compensated by the manufacturing drop of 4.3%. The mining increase during the quarter was pulled up by the 20% increase in copper sales (likely boosted by price), while the lithium drag continued during 2Q24 with a 39% drop. On the imports front, total imports contracted 5.1% YoY. Consumer goods fell 3%, with durable goods continuing to post a mild downturn (-0.4%; -0.5% in 1Q24). Capital imports decreased 12%, a similar decline to that registered in 1Q24, and in line with still weak investment dynamics. Sequentially, exports dropped 2.9% QoQ/Saar, while total imports fell a milder 1.1% QoQ/Saar.


Our take: The gradual domestic demand recovery has, so far, not led to a significant import boost. The persistent weakness in the imports of capital goods, which have contracted in annual terms since October 2022 and at a double-digit annual rate for the past three months, suggest investment dynamics are unlikely to pick up materially in the short-term. The improved terms-of-trade should support a large trade surplus this year and preserve a narrow CAD. We have a downside bias to our 3.2% of GDP call for this year (3.6% last year).