Argentina faces financial challenges and a drop in global trade. Some experts think closer ties with Brazil could help.
Brazil might offer loans and credit to boost Argentina’s economy and jobs. In short, leaning on Brazil could offer economic benefits for Argentina.
This option could be easier than dealing with global groups, especially when Argentina is financially weak.
Trade data from August 2023 shows Argentina had a US$292 million trade gap with Brazil. This marks the eighth straight month of a trade deficit.
Trade between Argentina and Brazil fell by 10.7% in August 2023 compared to last year. This decrease mainly came from a 10.6% fall in imports, despite a 14% increase in exports.
Exports from Argentina to Brazil dropped by 13.3% in August 2023. These exports totaled US$1.14 billion.
Meanwhile, imports from Brazil were US$1.43 billion, down 8.4% from last year. This led to Argentina’s eighth consecutive monthly trade gap of US$292 million.
From January to August 2023, Argentina’s trade with Brazil left a US$4.47 billion hole.
Exports from Argentina fell by 5% compared to last year. In contrast, Brazilian exports rose by 20.4%.
Brazil is Argentina’s top trade partner. This relationship often leads to trade deficits for Argentina.
The fall in exports to Brazil was mainly due to fewer vehicles, engines, and raw wheat shipments.
On the other hand, the decline in imports was mostly because of lower demand for cars and electricity.
Can Brazil help
Argentina and Brazil have a long history of trade and cooperation. Both are members of Mercosur, a South American trade bloc.
Yet, their trade balance has not always been even. Argentina has bought more from Brazil than it sold for years, leading to trade deficits.
This is not new but has intensified recently due to Argentina’s economic issues.