ARGENTINA – Positive trade surplus surprise in July due to strong exports

We forecast a trade surplus of USD 12 billion for 2021, slightly down from USD 12.5 billion in 2020

Juan Carlos Barboza & Diego Ciongo

19/08/2021


The trade balance showed a surplus of USD 1.5 billion in July, flat relative to a year earlier but above market expectations of USD 1.1 billion according to Bloomberg. The 12-month trade surplus stood at USD 11.0 billion. At the margin, the seasonally-adjusted annualized surplus for the quarter ended in July rose to USD 16.7 billion (from USD 14.7 billion in 2Q21).

Solid export growth driven by higher commodity prices and strong industrial exports. Total exports increased by 42.4% yoy in the quarter ended in July, from 40.5% in 2Q21. On a seasonally-adjusted basis, exports grew 52.1% qoq/saar (from 22.9% qoq/saar in 2Q21). Agriculture exports, including manufactured agricultural products, increased by 28.6% yoy in the same quarter (from a 27.7% yoy gain in 2Q21), led by shipments of soy derivates and cereals. Exports of industrial products – driven by car sales – increased by 101.3% yoy in the quarter ended in July (from 105.5% in the previous quarter).

Strong imports. Total imports rose by 69.1% yoy in the quarter ended in July (from 68.0% yoy in 2Q21) and 27.0% qoq/saar (vs. 20.6% in 2Q21). Purchases of capital goods and parts increased by 69.2% yoy in the period, followed by intermediate goods (43.5% yoy), while imports of consumer goods (including cars) expanded by 22.5% yoy.

The 12-month energy trade deficit continued to widen. The rolling 12-month balance as of July came in at a deficit of USD 611 million, from a surplus of USD 690 million in December 2020, following an increase in oil and gas imports.

We forecast a trade surplus of USD 12 billion for 2021, slightly down from USD 12.5 billion in 2020. 

Juan Carlos Barboza
Diego Ciongo