Itaú BBA - ARGENTINA – Strong trade surplus despite decline in exports

Macro Latam

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ARGENTINA – Strong trade surplus despite decline in exports

Abril 22, 2020

We expect a wider trade surplus this year.

Trade surplus remains wide. The trade balance posted a USD 1.1 billion surplus in March, similar to the surplus registered in same month of last year. Thus the last-12-month trade surplus remained at USD 17.3 billion. At the margin, annualized surplus adjusted for seasonality dropped to USD 16.0 billion in 1Q20 from USD 20.0 billion in the quarter ended in February.

Exports declined across all categories. Total exports decreased by 6.9% yoy in 1Q20 (down from 0.8% yoy in the quarter ended in February). On a sequential basis, exports plummeted by 46.5% qoq/saar (from 26.0% in the February). Agricultural exports including manufactured products declined by 2.7% yoy in the first quarter of the year, mostly driven by lower sales of soy bean flour, pellets and oil seeds (down from 2.8% growth in February). Sales of industrial products fell by 11.9% yoy in the period, from an 8.0% yoy decline in the quarter ended in February. 

Imports fell sharply at the beginning of the year. Total imports declined by 18.6% yoy in 1Q20, in line with weak economic activity. At the margin, imports fell by 6.8% qoq/saar (-12.8% in February). Consumer goods imports (including cars) dropped by 21.8% yoy in the period. Imports of intermediate goods were down by 14%, while purchases of capital goods and parts declined by 22.1%. 

Energy trade balance deficit remained low. The rolling 12-month trade deficit came in at USD 0.4 billion, slightly up from February.   

We expect a wider trade surplus this year. We forecast a surplus of USD 17.5 billion (from USD 16 billion in 2019), mostly due to subdued imports, given the sharp contraction in activity linked to the measures to contain the spread of COVID-19. 

Juan Carlos Barboza
Diego Ciongo

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