In the first quarter for the first time in 8 years the twin surpluses returned, with positive results in the fiscal and commercial front. But while the recession reduces the chances that the favorable balance persists in the fiscal accounts, at the same time it enhances the trade surplus: with the crisis, imports collapse – they fell 27% in the first quarter – while exports promise growth slow, but sustained. Thus, analysts predict that the year will close with a balance in favor of between US $ 8,500 and US $ 11,000 million. Economists argue that if the decline in the price of soybeans is maintained, the biggest impact will be seen next year and not this one.
“The Argentine macroeconomy is going through a process of fiscal and external adjustment, with a strong impact on consumption and economic activity that contracts at rates close to 7% year-on-year,” says the IARAF. In the first quarter, the primary surplus of the public sector -without counting the debt payment- was $ 10,347 million, thanks to a strong contraction in spending rather than a rise in revenues. For the IARAF this dynamic makes it difficult to maintain the result.
At the beginning of the year the result was also favorable for foreign trade. Between January and March, Argentina exported US $ 14,186 million, down 2.3% year-on-year. On the other side of the scale, imports reached US $ 12,171 million, 28% less than in the same period of 2018.
These numbers allowed reaching a surplus of US $ 2,016 million, equivalent to 0.4% of GDP. In the same period last year we had a deficit of US $ 2,400 million. Although until now the exports are ironed for all the year they are expected that they grow around 15% in dollars. Behind this jump is the record harvest of 145 million tons that leaves behind the bad performance of the drought in 2018.
The estimate of LCG for this year is a trade balance of US $ 10,000 million with exports of US $ 71,000 million. “For now we are not correcting the calculation to the downside because of the fall in the price of soybeans because much of the harvest is already negotiated. But if these prices persist, they will have an impact in 2020, “says economist Guido Lorenzo.
What happens with imports in the coming months and therefore with the commercial balance, will depend on the evolution of the activity. The reason is that imports have a strong elasticity with the GDP: for each point that grows the products go up 3 points for purchases abroad. “If as we expect the activity falls 1.7% this year, the surplus will be US $ 10,000 million. If the activity at some point is recovered, the surplus could be more limited. ” The estimate of LCG is that imports will shrink by 7.5% in dollars.
Ramiro Castiñeira, from Econometric, is also seeing the surplus around US $ 10 billion. “The trade balance is going to be high because, due to the crisis, we stop consuming to export, generate domestic savings and finance the State,” he explains.
For the year, Ecolatina projects a balance in favor of US $ 8,500 million, with exports growing 7% and a decline of 12% in imports. “The erratic policy of the national government, the lack of predictability on the evolution of the real exchange rate, a greater tax burden for exporters and a brake on infrastructure improvements do not provide optimistic prospects.” As soon as economic activity begins to recover, the old problems will reappear and the trade deficit will soon be manifested again. “
The ACM consultancy anticipates a 2% GDP cut for the entire year, which will result in a trade surplus of between US $ 8,000 and US $ 9,000 million. The projection they handle is that exports will rise not only due to the effect of the record harvest, but also due to the impact of Vaca Muerta. The economist Juan Lezica mentions that “we must pay attention with the level of liquidations of the agriculture, which with prices like the current ones can slow down a bit and that can have an impact of between US $ 1,500 and US $ 3,000 million in the total of the exports this year, which would reduce the trade surplus. “