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ECONOMY | 26-01-2019 10:55

Trade deficit fell by 54% in 2018 amid recession, devaluation

Argentina’s trade deficit fell by 54 percent in 2018 with respect to the previous year, amid the recession and depreciation of its peso.

Argentina’s trade deficit fell by 54 percent in 2018 with respect to the previous year, amid the recession and depreciation of its peso, according to a report posted Tuesday by the INDEC national statistics bureau.

However, a recovery in the last third of the year with the aid of a maxi-devaluation did not suffice to prevent the 2018 trade balance from ending in the red to the tune of US$3.82 billion on the strength of the first two-thirds of the year.

INDEC was able to announce a final figure for last year after reporting the December trade figures – exports of US$5.282 billion (up 15.4 percent on the closing figure of 2017) and imports of US$3.913 billion (down 27.1 percent from the last month of the previous year) for a surplus of US$1.369 billion as against US$984 million in November.

NUMBER-CRUNCHING

These data show the surpluses since September to be based more on plunging imports than export pick-up yet the figures for the year as a whole indicate the opposite tendency – exports in 2018 totalled US$61.621 billion (5.1 percent up on 2017) while last year’s imports were US$65.441 billion (2.2 percent lower than the previous year).

This pattern was somewhat unexpected since exports had been badly hit by last summer’s drought as well as stimulated by the devaluation, whereas imports had been pulverised by the halving of the peso’s value and yet export growth outweighted import decline for the year overall.

Primary products were the export sector generating most growth last month (up 36.9 percent) while manufactured goods averaged a far more modest 10.9 percent. Energy exports fell off 13.5 percent to US$ 268 million. The main casualties among imports were capital goods (down 38 percent) and fuels, which dropped by 33.9 percent with more import substitution.

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