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Argentina: Robust trade surplus recorded, consumer confidence at over one-year high

Christian Fernsby |
Exports rebounded, albeit timidly, and grew 1.7% in year-on-year terms in April, contrasting March’s 5.0% contraction.

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April’s increase was the result of rising exported quantities, while prices declined notably.

It came on the back of a jump in exports of primary products, and of a healthy expansion in foreign sales of fuels and energy products.

On the other hand, exports of manufactured products of industrial origin, and of manufactured products of agricultural origin, continued to fall.

In terms of export markets, overseas sales to China, Peru and Vietnam rose considerably and were only partially counterbalanced by reduced exports to Brazil, the U.S. and Chile.

Imports nosedived 31.6% annually in April, a slightly softer fall than March’s 33.7% plunge.

Abysmal falls in the imports of passenger motor vehicles, capital and consumption goods, led April’s contraction.

Meanwhile, the trade balance surplus narrowed marginally from a USD 1.2 billion surplus in March to a USD 1.1 billion surplus in April, the eighth consecutive surplus after 20 months in the red (April 2018: USD 0.9 billion deficit).

The 12-month rolling trade balance improved from a USD 0.6 billion surplus in March to a USD 2.6 billion surplus in April (April 2018: USD 10.3 billion shortfall), marking the second surplus since April 2017.

Panelists participating in the LatinFocus Consensus Forecast expect exports to expand 10.6% in 2019 and imports to decrease 10.4%, pushing the trade balance to a USD 9.5 billion surplus.

For 2020, the panel expects exports to increase 6.1% and imports to grow 7.7%, with a trade surplus of USD 9.1 billion.

The Universidad Torcuato di Tella (UTDT) consumer confidence index rose to 36.5 points in May from 34.4 points in April, marking the best result in 13 months.

Therefore, the index moved slightly closer to the 50-point threshold that separates pessimism from optimism among consumers, below which it has been for over a year.

May’s print reflected an improvement in all three sub-components of the index.

Consumers’ assessments of their personal finances improved slightly, while consumers’ willingness to purchase big-ticket household items strengthened notably, although it remained at abysmal levels.

Lastly, their outlook on the broader short-term macroeconomic situation improved markedly.

Panelists surveyed for the LatinFocus Consensus Forecast see private consumption dropping 2.5% in 2019, which is unchanged from last month’s forecast.

For 2020, panelists expect private consumption to increase 2.5%.


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