BUENOS AIRES -Argentina’s trade surplus probably shrank in November as a surprise increase a month earlier proved fleeting amid a torrent of imports going into the holiday season.
The national statistics agency, Indec, is expected to report a trade surplus of $651 million for November, according to the median estimate of eight economists surveyed by Dow Jones Newswires.
Indec is scheduled to publish its monthly trade report Wednesday at 2 p.m. EST.
If that estimate is correct, the surplus for the 12-month period ending Nov. 30 would total $10 billion.
«In spite of weaker imports growth, sluggish exports will lead to a lower trade surplus,» Bank of America Merrill Lynch economists said in a note.
Indeed, trade is very much on the minds of Argentine policymakers attending the Mercosur summit in Uruguay this week.
Argentina and Brazil, the largest members of the South American customs union, are keen to expand the list of goods subject to Mercosur’s common tariff on imports from outside the block to protect local industry from a flood of cheap Asian products.
Argentina has enjoyed a hefty trade surplus for years thanks to a global commodity boom that has underpinned high prices for its exports of grains, soybeans and related products like edible oils. Industrial goods have also become an important contributor to the surplus thanks to Brazilian demand for automobiles and autoparts.
Those surpluses have allowed the Central Bank of Argentina to accumulate international reserves, which today are an important source of financing for the federal government.
After peaking at nearly $17 billion in 2009, the trade surplus has started to shrink as a booming economy and the inflation-adjusted appreciation of the peso have fueled a torrent of imports.
President Cristina Kirchner, who earlier this month was sworn in for a second term, has erected a host of trade barriers to protect local manufacturers and the surplus.
Those barriers include expanding the number of products subject to lengthy non automatic import licensing as well as informal bans on imported goods as diverse as Barbie dolls and French cheese.
At the same time, the authorities have prodded big importers to export goods of a similar value or, in the case of the automobile industry, source more of their components locally.
Though it’s hard to know how much of an impact those measures have had on trade, this year’s trade surplus is on track to easily exceed the central bank’s original forecast of $8 billion.
The government’s latest estimate sees a trade surplus of $9.5 billion next year.
But it’s energy–not imported toys, smartphones and cheese–that has taken the biggest bite out of the trade surplus.
Argentina ran a deficit of $2.9 billion in energy products during the first 10 months of the year, as generous subsidies and price caps that have dampened interest in oil and gas exploration forced the government to import significant quantities of natural gas and other fuels.
The Kirchner administration has started to cut energy subsidies for a range of industries and for wealthy residents in the capital, but the country will likely continue to be a net energy importer in the immediate future.
-By Ken Parks, Dow Jones Newswires; 54-11-4103-6740, ken.parks@dowjones.com
Source: Dow Jones