Despite devaluation, Argentina logs $160 million trade deficit in Macri's first full month in office [View all]

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Argentina registered a merchandise trade deficit in January of $160 million, the National Institute of Statistics and Census (INDEC) reported today.

The pullback in the nation's trade balance during the first month of 2016 was due to a fall in average export prices, especially agricultural commodities, of 17%. The deficit in January was nevertheless registered during the first full month in which President Mauricio Macri's export tax decrees were in effect, as well as the first full month after the 40% devaluation of the peso ordered on December 17.

These policies were touted as an effective stimulus for exports of industrial products and crops such as soy, wheat, corn, and regional products such as orchard produce. Total merchandise exports, however, reached $3.886 billion - a 9.5% decline from the $4.294 billion reported at the same time last year.

Argentina's dependence on agricultural exports (mostly milled and processed goods) increased markedly last month, with the share of exports from this sector increasing from 61% of the total a year ago to 68%. Agricultural exports grew by 1.5%, to $2.638 billion, despite a 21% collapse in agricultural export prices over the past year.

Industrial exports, however, did not share in the improvement, and plummeted by 28.6% from $1.378 billion in January 2015 to only $984 million in January 2016 mostly on lower quantities - the lowest reading for industrial exports in a decade. Energy exports fared even worse, plummeting by a third to $144 million in January.

Imports, meanwhile, outstripped exports for the third month in a row. These reached $4.046 billion, 4.1% below January of last year. Import prices fell 10% from a year ago, and this helped offset the 6% rise in import quantities that resulted from the Macri administration's lifting of most import controls.

As was the case with exports, imports in January exhibited a noticeably uneven performance depending on the sector: while imports of intermediate goods (those used as inputs in the production of other goods) fell by 18% from the same time last year, imports of motor vehicles and parts soared by 121%. This sharp increase occurred despite a 15% drop in auto sales during January, compared to the same time a year ago.

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