The trade balance posted a deficit of USD 1.5 billion in April, broadly in line with market consensus (as per Bloomberg) of a deficit of USD 1.4 billion. The 12-month rolling trade balance stood at a deficit of USD 26.6 billion in April (from a deficit of USD 26.9 billion in March), with the energy and non-energy trade balances at a deficit of USD 37.1 billion (from a deficit of USD 37.5 billion) and a surplus of USD 10.5 billion (from a surplus of USD 10.6 billion), respectively. At the margin, using three-month annualized seasonally adjusted figures, the trade balance stood at a deficit of USD 25.6 billion in April (from a deficit of USD 16.2 billion in 1Q23), dragged by a lower non-energy trade surplus of USD 6.5 billion (from a surplus of USD 18.2 billion), while the energy trade balance stood at a deficit of USD 32.1 billion (from a deficit of USD 34.4 billion).
Manufacturing exports momentum weakened, consistent with a softer external scenario. Using seasonally adjusted series, manufacturing exports fell by 2.6% mom/sa, dragged by vehicle exports (-10.8%), while non-vehicle exports expanded 1.6%. The quarter-over-quarter annualized growth rate (qoq/saar) for manufacturing exports stood at -2.3% in April (from 6.4% in 1Q23).
Non-energy imports momentum remained positive. Also using seasonally adjusted figures, non-energy imports expanded 4.3% mom/sa, supported by consumption (2.7%), intermediate (4.4%) and capital (5.5%) goods imports. The qoq/saar growth rate of non-oil imports stood at a positive 9.7% in April (from 4.6% in 1Q23).
Our trade balance forecast stands at a deficit of USD 20 billion for 2023. Manufacturing exports are likely to soften throughout the rest of the year given a weaker U.S. GDP, which will be mitigated by a slower growth of non-energy imports as internal demand softens.