Regarding what may happen in the coming months, analysts warn of a series of factors (among which the drought stands out) that could impact exports, while the shortage of foreign currency will affect imports. In that scenario, warn of unfavorable prospects for the coming months.
As reported by INDEC, The commercial exchange reached US$12,505 million in March: imports were for US$6,782 million, while exports were US$5,723 million.
When detailing the exports for large items, It was noted that primary products had a 33.5% year-on-year drop in March, while “manufactures of agricultural origin” contracted 29.4%. “Manufactures of industrial origin” dropped 5.3%, while “fuel and energy” fell 6.6% year-on-year.
On the side of the importsa 16.6% drop in “capital goods”, 11.8% in “consumer goods” and 45% in “fuels and lubricants”. On the contrary, “intermediate goods” (10.6%), “parts and accessories of capital goods” (10.6%) and “passenger motor vehicles” (1.2%) rose.
Future prospects
Meanwhile, when analyzing what can happen in the near future, from the Abeceb consultancy they pointed out: “The prospects for the future are not favourable, especially for the coming months in a context in which the impact of the drought on the harvest and agro-industrial exports are deepening. In fact, in the last month the projections of agro-industrial exports were revised downwards, which would fall by around US$14,000 million in relation to 2022”.
“In this context, only an additional turnstile on imports would allow closing the year 2023 with a slight trade surplus of around US$2,000/3,000 million (with a downward risk).; less than half of that verified in 2022 ($6,923 million) and less than a fifth of the ‘super’ positive trade balance of 2021 ($14,750 million)”, they detailed.
“In seasonally adjusted terms, exports fell 7% per month, which was expected. Although the impact of the droughtit is important to say that not only agricultural exports fall, but also those of industrial manufacturing (only offset by the good performance of automotive exports) and energy exports,” he analyzed Ambit Eugenio Marí, Chief Economist of the Libertad y Progreso Foundation.
“On the other hand, it can be seen that imports, also in the series without seasonality, rose almost 9% per month. We cannot take off this dynamic of the exchange control regime, which acts as a subsidy on imports”, added Marí.
“That said, we estimate that exports this year will fall by around 20%. While imports will fall even more compared to last year, hand in hand with less economic activity and greater controls as the BCRA depletes its stock of net reserves”, explained the analyst.
For their part, from LCG they mentioned that “the Rosario Stock Exchange continues to adjust its harvest projections downwards due to the drought that afflicts the country.” “Based on this, we estimate that exports could fall between US$15,000 and US$18,000 million, resulting in a total of US$71,000 million (20% less than in 2022).”, they explained.
“The lower availability of foreign currency, associated with the drop in exports, will sustain and could even deepen controls on imports. Without room for maneuver, this cut will continue to have direct negative consequences on domestic prices and the level of activity,” they concluded from LCG.
Source: Ambito
