Argentine exports in 2022: why the historical record could be misleading

Driven by the latest commodity supercycle, Argentine exports would have closed 2022 at a historic record, exceeding the mark of US$82.9 billion reached in 2011. However, foreign sales per capita and the variation to The drop in the total number of exporting companies in the country explain why this new nominal peak could be misleading.

The INDEC will release its monthly report on “Argentine Trade Exchange” corresponding to December on January 19, but the figure up to November (US$82.293 billion) already predicted a new peak for the total dollars generated during 2022.

With Brazil, China and the United States as the main destinations, and primary products –US$22.586 billion and 27.5% of the total– at the head of the most exporting items, between January and November foreign sales generated 15.3% more dollars than during the same period of 2021.

Assuming that the Rosario Stock Exchange estimate of total sales of US$90.7 billion in 2022 will be met, and taking a population of 47.33 million Argentines, according to the 2022 National Population, Household and Housing Census, the Argentina’s per capita exports last year would have been US$1,916.

Although this is an improvement compared to US$1,600 per Argentine in 2016, according to official data, it is still far behind the per capita exports of countries such as Chile, Mexico, Australia, Italy and Spain.

In the case of Uruguay, which exports many of the same raw materials as Argentina, the neighboring country reached foreign sales of US$3,893 per inhabitant in 2022.

“It is a very relevant piece of information, which has a correlation with the GDP per capita and the human development index of each country”, commented the ABECEB economist, Soledad Pérez Duhalde. And she added: “China has been rising, and today it has 1.4 more exports per capita than Argentina, which in the past had managed to overcome the barrier of US$2,000.”

HOW MANY COMPANIES EXPORT IN ARGENTINA

Another fact that suggests that Argentina has a latent export potential greater than the one it exhibits is that the companies that exported from the country in October of last year (9,600) were 25% less than the total registered in 2011 (12,800).

THE CASE OF URUGUAY AGAINST THE ARGENTINE

Consulted by this means about the comparison between the export performance of Argentina and Uruguay, the expert in international trade, Marcelo Elizondo, affirmed that the first is “a country with an endocentric disposition, which privileges the attention of its domestic market, and the focus of its production inwards”.

“It places obstacles to exports, such as high taxes, which we call withholdings, a great restriction on the official exchange rate, which is delayed below market values, and it is a great discouragement because it takes away profitability, and by limiting imports of capital goods or capital inputs, Argentina hinders competitive production for export,” he continued.

Elizondo also highlighted a greater opening of Uruguay to the entry of foreign investment, “unlike Argentina, which hinders it, and does not achieve a sufficient scale with companies that participate in a global scale of value, as they could do”.

“It also affects the fact that Uruguay is a stable economy, with great respect for property rights, which encourages medium- and long-term projects, while Argentina has a very short-term economy, and with a lot of instability,” he concluded.

With information from  Bloomberg