RIO DE JANEIRO, BRAZIL – Imports from the main MERCOSUR partner country rose 55% (53% cumulatively in the year), while exports increased 60% in the month (46% so far in 2021).
In August, trade in goods with Brazil exceeded US$2.1 billion, reaching the highest level in 3 years. According to a report by a consulting firm, the change in trade flows was 57% compared to the same month last year, marking a series of 8 consecutive months of increases, and cumulatively a 49% increase so far in 2021 Ecolatina.
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At the same time, this upturn more than offsets the pandemic-related decline, as sales and purchases of goods to and from the main trading partner are 7% higher than the same period in 2019.
According to the report, trade has increased on both the import and export sides, and at similar rates. Imports from the main MERCOSUR partner increased by 55% (53% cumulatively in the year), while exports increased by 60% in the month (46% so far in 2021).
Meanwhile, the trade balance showed a negative balance of US$116 million for Argentina, a 20% increase compared to the same month in 2020. Year to date, the trade balance with Brazil showed a deficit of US$676 million, compared to US$211 million in the same period last year.
Both exports and imports exceeded 2019 levels. Considering that global trade was affected by the pandemic in 2020, it makes more sense to compare bilateral trade with 2019, which was not affected by the pandemic.
In this sense, both purchases and sales already exceed the values of this year. Compared to August of the same year, exports were 21% higher and imports 29% higher. In the annual perspective, purchases were cumulatively 14% higher than in the first 8 months of 2019, while sales exceeded this value for the first time.
The growth of trade reflects the recovery of both economies. However, it also means higher net consumption of foreign exchange for Argentina, as the trade balance with Brazil is traditionally in deficit, especially since the projected growth for Argentina (+7.0% per year) is higher than for Brazil (+5.2%).
However, the consultancy warns that “the expectation of an increase in the exchange rate after the elections could lead to bringing forward some purchases and postponing some sales, widening the trade deficit. In any case, this deficit will be more than offset by positive balances with other destinations so that we will have an overall trade surplus in 2021.”