In July, the deficit with Brazil reached $ 370 million and was the highest in the last four years

In July, Argentina had a trade deficit with Brazil of 370 million dollarsthe largest commercial red since June 2018. Higher imports of vehicles, auto parts and fuels explain the negative result.

Behind this large deficit is the sharp jump in imports: last month, while exports to Brazil increased 12.1% year-over-year, external purchases rose by 39.1%.

Imports from Brazil reached $ 1.395 million in the month of July. According to the consultancy firm Abeceb, among the products with the highest participation the automotive sector stands out: the purchase of “Passenger vehicles” grew by 115.5% year on year, while that of “Parts and accessories for motor vehicles” has made by 58.2%. These two elements explain 21.7% of total imports.

The import of “petroleum fuels or bituminous minerals (excluding crude oil)” also grew strongly, due to the combination of increased energy needs in winter and the increase in prices compared to last year. Purchases of this item went from US $ 2.8 million in July 2021 to $ 58.5 million last month.

Finally, imports of “Paper and cardboard” and “Iron ores and concentrates” increased from one year to another by 30.3% and 6.0%.

Exports to Brazil reached $ 1,025 millionthe lowest value since March 2022, and a significant drop of 20% from the average of the last two months.

The item “Motor vehicles for the transport of goods and special uses” recorded a decrease of 26.9%. Among the products on the rise was the behavior of “Wheat and rye, not ground”, which grew by 67.5%, followed by “Passenger vehicles” (34.9%), “Piston engines and their parts” (30, 7 %) and “Parts and accessories for motor vehicles” (27.2%).

Barriers to imports

Therefore, the cumulative bilateral trade deficit up to July was 1,719 million dollars. This represents a decline of $ 484 million in relation to the balance for the same period last year. In the first seven months of the year, imports increased double that of exports (34.2% against 16.8%).

“Moving forward we expect a deepening of the bilateral trade deficit, which it would close the year at around $ 3,000 million-, given that imports will continue to grow above exports, “says Abeceb. Last year it closed with an unusual surplus for Argentina of 66 million dollars, generated by the import obstacles imposed by the government of Alberto Fernández.

“It is important to note that the projected deficit would be even higher were it not for the growing restrictions on imports. Although the Central Bank in July improved access to the Free Single Exchange Market (MULC) for the payment of automobile imports, great obstacles are not ruled out given the difficulty that the monetary authority is encountering in accumulating reserves “, underline from the consultancy.

In the total of Argentina’s foreign trade, the country accumulates a surplus of 3.093 million dollars in the first half, with imports up 44% year on year and exports up 25%. External energy purchases account for much of the jump in imports, but even so, thanks to the extraordinary crop prices, 2022 is expected to close with a favorable balance of around 10 billion dollars.

AQ