The terms of trade suffered their fourth consecutive quarterly decline. The contraction was 3.9% in the third quarter.
Terms of trade fell for the fourth consecutive quarterbecause export prices had a greater drop compared to the decrease in the value of imports. As a consequence, The country suffered a loss of US$856 million.
According to official data from INDEC, in the third quarter of 2024, the terms of trade, which measures the evolution of the purchasing power of a physical export unit in terms of imports, fell 3.9% versus the same period in 2023. This happened since the price of sales abroad fell by 5%while in purchases the decrease was 1.1%.
In parallel, exported quantities experienced a year-on-year increase of 24.4%, while imported quantities decreased by 17%. Therefore, the dynamics of quantities explained the trade surplus of US$4,389 million which was verified between July and September.
The deterioration in the terms of trade prevented a greater trade surplus
From the INDEC they explained that, if in the third quarter of 2024 the prices of the same period of the previous year had prevailed, the trade balance would have shown a positive balance of US$5,296 million. Under this assumption, and given the deterioration of the terms of trade, the country recorded a loss in these terms of US$856 million dollars.
On the export side, during the period in question there were increases in the quantities sold of manufactures of agricultural origin (+42.9%), which more than compensated for the decline in their prices (-8.5%), and fuels (+28.3%). Likewise, the main price drop was observed in primary products (-12.4%).
On the import side, the annual collapse in quantities was led by capital goods and its parts (-27.2% for parts and -19.1% for finished goods). On the other hand, the prices that decreased the most were those of fuels (-20.8%) and intermediate goods (-4.8%).
In the accumulated of the year, the balance of the trade balance was a surplus in US$15,075 million. However, if the prices of the same period of the previous year had prevailed, the result would have been US$17,733 millionwhich represents a loss in the terms of trade of US$2,102 million.
Source: Ambito
