Itaú BBA - ARGENTINA – Trade surplus remained solid at the beginning of the year

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ARGENTINA – Trade surplus remained solid at the beginning of the year

Fevereiro 21, 2020

Weak imports sustained a wide trade surplus in January.

Weak imports sustained a wide trade surplus in January. The trade balance showed a USD 1.0 billion surplus, below our call of a USD 1.2 billion surplus but above the USD 0.4 billion surplus registered in same month of 2019. The 12-month trade surplus rose to USD 16.6 billion, from USD 16 billion in December 2019. At the margin, the annualized surplus adjusted for seasonality decreased slightly to USD 24.2 billion in the quarter ended in January, from USD 25.4 billion in 4Q19.

Deceleration in exports was driven by the Agriculture sector. Total exports increased by 3.6% yoy in the quarter ended in January, down from 6.7% yoy in 4Q19. Agricultural exports (including manufactured products) grew 8.8% yoy in the quarter, on higher wheat shipments (down from 15.2% in 4Q19). Sales of industrial products fell by 3.6% yoy, following a 4.5% drop in the last quarter of 2019. On a sequential basis, exports increased by 13.8% qoq/saar.  

Lower imports reflect declining internal demand. Total imports declined by 19.3% yoy in the quarter ended in January (-20.1% yoy in 4Q19), in line with persistently weak economic activity. Consumer goods imports (including cars) fell by 20.8% yoy in the period, affected by a weaker currency and lower real income. Imports of intermediate goods dropped by 23.9% in the period, while purchases of capital goods and parts declined by 15.2%. At the margin, imports fell by 23.2% qoq/saar (-34.3% in 4Q19).

Still-low energy trade balance deficit. The rolling 12-month trade deficit remained unchanged at USD 0.3 billion in January.

We expect the trade surplus to remain wide in 2020. We forecast a USD 14.5 billion trade surplus for 2020, vs. USD 16.0 billion in 2019. Weak activity will likely lead to a current account surplus of 0.4% of GDP, from an estimated deficit of 0.6% of GDP for 2019.

Juan Carlos Barboza
Diego Ciongo


 



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