The trade balance posted a deficit of USD 4.3 billion in January, above the market consensus of a deficit of USD 2.4 billion (as per Bloomberg) and our forecast of a deficit of USD 2.1 billion. On a 12-month rolling basis the trade deficit reached USD 5.7 billion in January, slightly above the deficit of USD 5.5 billion in 2023. The result is explained by a smaller energy trade deficit almost offsetting a narrower non-energy surplus. At the margin, using three-month annualized seasonally adjusted figures, the trade balance stood at a surplus of USD 5.1 billion in January (from a surplus of USD 7.4 billion in 4Q23). Looking at the breakdown, manufacturing exports momentum remained weak with a qoq/saar of -5.2% (from -4.0% in 4Q23), while the qoq/saar of non-energy imports fell by 6.5% dragged by intermediate imports (-11.7%) which are also associated to the manufacturing sector.
Our view: We expect a trade deficit of USD 17 billion in 2024 (from a deficit of USD 5.5 billion in 2023). While external demand will be supportive for manufacturing exports, non-energy consumption and investment imports are likely to remain solid, driven by a favorable evolution of internal demand which is also supported by the expansionary fiscal stance.
See detailed data below
