Imports from Brazil have skyrocketed and trade deficit peaked in 3 years

Argentina’s trade balance with Brazil turned into a deficit of $ 470 million last May. Red is the biggest since August 2018 and it responds to a much stronger recomposition of imports than exports compared to a year ago, when a strict quarantine was applied in Argentina. For analysts, the data has a double reading. On the one hand, they reflect the rebound of the two main economies of the continent, but they also show that with the ironed official dollar, importers tend to buy abroad.

“Argentina’s exports to Brazil grew 102.6% year-on-year in May, adding $ 810 million, the fifth consecutive increase, while imports from this destination amounted to $ 1,281 million and posted a increase of 185.7% compared to May 2020. Thus, Argentina’s trade balance posted a deficit of 470 million US dollars in May, an increase of 546.3% per month. Likewise, an increase of 876.2% is observed in the inter-annual comparison, because in the same month of 2020 there was a deficit of 48 million US dollars, ”reported the Argentinian Chamber of Commerce based on data from the Brazilian Ministry of Economy.

After the blow to activity assumed by 2020, the increase in trade is one of the highlights. The total reached $ 2,091 million in May, or 146.5 percent from the same month in 2020, when it was just $ 848 million. From April to May, it also increased by 21.5% compared to the previous month.

“This improvement in bilateral merchandise trade reflects the good performance of the two economies at the start of 2021: Brazilian growth expectations are constantly being revised upwards, despite their health situation, and many industries in our country have shown even higher activity levels. pre-pandemic ”, analyzed a report by Ecolatin.

“However, the recovery is faster on the import side, which makes the exchange balance unfavorable. Thus, in May, the trade imbalance was $ 470 million, the largest deficit for this account since June 2018. This red is significantly higher than the deficit of $ 50 million observed in May 2020 ″, adds the same report.

Falling prices for goods from Brazil may be behind this trend. The wholesale dollar, the one that governs trade, has risen 12.6% so far this year, while inflation over the same period accumulates at least 21.7% if the inflation data floor private is taken in May, around 3.5% per month. In real terms, that is to say relative to the rate of increase in the general price level, the wholesale dollar has fallen sharply this year.

“The recovery is faster on the import side, which makes the exchange balance unfavorable” (Ecolatina)

On a year-to-date basis, in the first five months of the year, the trade flow between the two economies grew by 43.7% year-on-year, reaching $ 9,047 million, while the Argentina’s trade balance posted a deficit of $ 523 million. compared to the surplus of 120 million USD in the same period of 2020. Argentina’s imports increased 54.9% year-on-year in this comparison, while exports increased 32.8%.

Brazil posted a record trade surplus of $ 9.291 billion in May. The country’s exports to the world totaled $ 26,948.3 million, which is a 46.5% jump from the same month last year and is also a record for the month.

Among the main export items from Argentina to Brazil, motor vehicles for the transport of goods, wheat and unground rye, and passenger vehicles stand out, while the bulk of imports are explained mainly by hydrocarbons and their halogenated, sulphonated, nitrated or nitrosated derivatives. , passenger vehicles and motor vehicle parts and accessories.

“It should be noted that the participation of Argentine products in the Brazilian market has further increased by 0.5 percentage point compared to May of the previous year. Thus, after reaching historic lows in 2020 (purchases from Argentina represented 4.8% of Brazil’s total imports over the January-May period), the share of our sales was 5.2% so far in 2021. Despite this improvement, we are still far from the average of the last ten years (6.5%), ”Ecolatina said.

As highlighted by the ACC, Argentina was ranked third among Brazil’s largest suppliers, behind China, Hong Kong and Macao ($ 3,889 million) and the United States ($ 2,765 million). In turn, among the top buyers in Brazil, Argentina was also third, behind China, Hong Kong and Macao (USD 9,769 million) and the United States (USD 2,763 million).

“Although the bilateral trade deficit has increased, we do not expect this to mean a significant restriction on the resumption of activity levels. This is due to the fact that the total flow of commercial currencies (all origins and destinations combined) showed a large positive balance, due – to a good extent – to the improvement in the prices of merchandise. Thus, the Central Bank accumulates net reserves (which have increased by more than 50% so far this year), ”Ecolatina concluded.

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