The trade deficit in July came in at USD 0.6 billion, widening by USD 0.1 billion with respect to July 2023. The trade deficit was above the Bloomberg market consensus of USD 0.3 billion and our USD 0.1 billion call. Total imports (FOB) rose by 11.5% YoY (-7.3% in June), boosted by consumption goods, intermediate good for agriculture and capital goods. Meanwhile, exports increased by 10.8% in July (-4.0% in June), partially boosted by a rebound in coal exports. As a result, the rolling 12-month trade deficit sits at USD 9.4 billion (USD 9.7 billion in 2023; USD 14.5 billion in 2022). At the margin, our seasonal adjustment shows the trade deficit at USD 11.1 billion (annualized), down from the USD 13.3 billion recorded in 2Q24.
Consumer goods imports on an upward trend. The 11.5% YoY increase was boosted by capital goods for industry (+39.7% YoY), consumption goods (+24.1% YoY) and intermediate goods for agriculture (+23.2% YoY). In the quarter ending in July, imports increased 2.1% YoY (+4.4% in 2Q24; -10.9% in 1Q24). Imports excluding fuels and transportation equipment rose from last year (+7.5% in 2Q24; +6.4% YoY in 2Q24). At the margin, we estimate imports increased 2.0% qoq/saar (+47.3% in 2Q24; -12.6% in 1Q24).
Coal exports boosted external sales. Exports increased by 10.8% YoY (-4.0% in June). Oil exports dropped 6.4% YoY (+10.6% YoY in June), due to both lower prices and volumes. On the other hand, coal exports increased by 30.4% YoY (-41% YoY in June), due to a surge in exported volumes of 70.6% YoY. Exports excluding traditional goods (oil, coal, coffee, and ferronickel), accounted for 55% of total exports an increase by 7% YoY while non-traditional expanded at a 15.9% YoY pace. In the quarter ending in July, exports increased 1.9% YoY (3.8% in 2Q24; 9.2% YoY drop in 1Q24), dragged by double-digit declines in coal and ferronickel, but countered by coffee, oil and agricultural exports. At the margin, exports increased 4.9% qoq/saar (+7.2% in 2Q24; -17.7% in 1Q24).
Our take: We expect the current account deficit to remain stable from last year at 2.5%, consistent with a low trade deficit, far from cyclical high of USD 1.6 billion in 2022.
