Argentina has had a trade deficit with Brazil for four months

So far this year, Argentina has accumulated a trade deficit with Brazil’s US $ 847 million and is planned to close the year with a red US $ 2,200 million. The economic weakness of the neighboring country, along with Argentina’s rising imports to take advantage of the cheap dollar in this part of the border, explains this result.

In April, the bilateral deficit in Brazil was $ 230 millionjumped 220.4% compared to the same month of 2021, when it reached US $ 72 million.

Argentina’s imports from Brazil rose 40% last month, a higher rate than in March when they rose only 10%. This time they have arrived US $ 1,259 million.

On the export side, after a slight growth in March with 4.4% compared to April 2021, they are now up 25%, reaching US $ 1,029 million.

In total, imports accumulated US $ 4,437 million in the first four months of the year, 27% higher compared to the same period in 2021, while exports reached US $ 3,590 million, a 4% increase. more.

Thus, the bilateral balance between January and April is negative $ 847 million (in the first 4 months of 2021 it was in deficit of US $ 53 million), “what confirms the tendency to expand bilateral red to our main trading partner“, suggests consulting firm Abeceb.

Among the products with the most weight in imports were “Motor vehicles for the transportation of goods and special uses”, with an increase of 115.9% year-on-year, “Paper and Cardboard”, with 101.5%, and “Parts and accessories for motor vehicles”, with 53.2%.

There was also an increase in the item “Wheat and rye, unmilled” (14.3%), which was largely explained by the record of the wheat harvest, as well as an increase in commodity prices as a result of the war between Russia and Ukraine.

The exports that grew the most were “Passenger vehicles” 134.5%), “Ethylene polymers, in primary forms” (113.5%) and “Piston engines and their parts” (20.7%).

Abeceb expects that in the coming months the deficit in Brazil will continue to grow. “Going forward, and in line with what was observed in the first quarter, the trend of the bilateral trade balance towards a higher deficit is expected to consolidate“, they pointed out. And they predict that the trade deficit is imminent $ 2.2 billion in 2022.

In this way, and after the exceptional 2021 and 2020, when there is a US $ 66 million and US $ 859 million surplus, respectively, bilateral trade continues on the path of deficit for Argentina. Abeceb details that between 2004 and 2018, the deficit averaged US $ 3,500 million, so the red forecast for this year indicates “a return to a historical ‘quasi-normality’ of the deficit balance between the two economies ”.

“We say‘ quasi-normality ’because we must not forget that fact the bilateral deficit for Argentina would have been even higher if not for growing restrictions on imports and the good performance shown by the transport sector, in particular, the favorable views of some heavy products -such as pick-ups-, less sensitive to the Brazilian economic cycle and more linked to the traction of sectors such as of agriculture “.

Many factors are playing against the recovery of Argentina’s exports to Brazil. The first is that this year Jair Bolsonaro’s country is showing little growth, estimated at 0.7% by the Central Bank of Brazil.

It happened along with a 5% devaluation in April of the Brazilian real, which stimulated Brazil’s exports to the world. But from now on, the neighboring country’s currency is expected to strengthen as a result of the increase in reference rates, in line with what is happening in the world’s major markets.

The real opened the year at 5.68 per dollar and now it trades at 5.08, even if the Barclays forecast is that will reach 4.55 by the end of June.

The Selic rate, the market reference rate, currently at 12.7%, is expected to rise to 13.25% to contain inflation, with a 7.89% annual price increase expected.

In April, Argentina is ranked fourth among the largest suppliers to Brazil, behind the United States (US $ 4,359 million), China and Hong Kong and Macao (US $ 3,983 million) and Germany (US $ 1,047 million). In turn, among the major buyers from Brazil, Argentina ranked third, behind China, Hong Kong and Macao (US $ 9,239 million) and the United States (US $ 2,902 million).

AQ