Argentina accumulates 10-month trade deficit with Brazil of US$ 510 million, same as pre-pandemic

RIO DE JANEIRO, BRAZIL – Argentina recorded in the first ten months of the current year a cumulative trade deficit of US$510 million, in line with the levels of 2019, before the pandemic, when a deficit of US$498 million was recorded, according to the consulting firm Abeceb, based on data surveyed by the Brazilian Ministry of Development, Industry and Foreign Trade.

Meanwhile, the country had a positive balance of US$92 million in October. In that framework, Argentine exports to Brazil totaled US$1.218 billion, with an improvement of 50.7% year-on-year, the highest level since September 2014, while imports from the neighboring country increased 37.6%, for an amount of US$1.126 billion, which resulted in the highest record since August 2018.

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“October’s goods trade balance reveals an improvement in terms of foreign exchange. It turned out to be in surplus for the second consecutive month (+US$ 92 million), improving on the US$ 9 million deficit recorded in October 2020. However, between January and October, the accumulated trade red amounts to US$ 510 million, exceeding the US$ 312 million of 2020,″ detailed the consultancy in a statement.

The trade numbers with the neighboring country were also a topic of conversation at the press conference that the governor of Buenos Aires, Axel Kicillof, and the ambassador Daniel Scioli gave this Wednesday in São Paulo, after holding a meeting with more than 70 companies with interests in both countries.

October’s positive result was influenced by the restrictions on automotive imports and the difficulties faced by Brazil in its supply of semiconductor chips.

“The Flex (coefficient that measures the deviation between imported and exported values) is at values (0.96 accumulated in 2021) well below the protocol value set by the trade agreement between both countries for the period (1.8), which favors a higher net generation of foreign currency for Argentina,” said Abeceb.

On the other hand, as a result of the worst drought in Brazil in 90 years, which affected its hydroelectric generation, Argentine exports of electric energy to the neighboring country increased, and at high prices, totaling US$ 670 million so far this year.

Thus, the commercial exchange with Brazil consolidates its recovery after more than two years of substantial decline. In October, the trade flow (exports plus imports) amounted to US$2.344 billion, with an improvement of 44.1% year-on-year, thus adding the tenth consecutive month of growth.

Based on these numbers, the flow accumulates an increase of 45.9% in 2021 and 11.4% compared to the same period of 2019, accounting for almost half a year ago for a full recovery from the impact of the 2020 quarantine.

“The improvement in trade responds to an acceleration in both exports and imports, maintaining an encouraging trend. In October, exports to Brazil totaled US$1.218 billion (+50.7% y-o-y), the highest level since September 2014, growing for the tenth month in a row. At the same time, our purchases from this origin jumped 37.6% year-on-year to US$1.126 billion (eighth consecutive month on the rise), the highest record since August 2018,″ the consultant specified.