Tuesday, September 24th 2013 - 08:04 UTC

Argentine trade balance collapsed 60% in August because of the energy import bill

Argentina’s trade balance collapsed 60% during August compared to a year ago because of stagnant exports and the doubling of energy imports according to the latest release from the government’s stats office, Indec.

Insufficient domestic production of hydrocarbons despite huge reserves and frozen prices have led to the current situation

The August surplus was 568 million dollars and 6.3bn dollars in the eight months of the year, which is 32% below the same period in 2012. August exports reached 7.7bn dollars, just 34 million dollars above July 2012, while imports soared 14% to 7.2bn dollars because of the growing cost of energy.

Indec points out that export were flat because of a 4% drop in prices, insufficient to compensate 5% increase in volume.

The declining tendency of Argentine exports started in June when the inter-annual increase dropped 8% from the 14% increase reported in May. In July the slide continued with a mere 2% increase while in August exports were flat compared to a year ago.

Commodity sales increased 5%; agriculture related manufactured goods 6% while industry manufactured goods remained unchanged. Fuel and energy sales of 349 million dollars, dropped 38%, with overall sales in the first eight months of the year 21% below the same period of a year earlier.

Imports increased 12% in price and 1% in volume with special incidence of energy. Purchases in August totaled 1.55 billion dollars which is 103% higher than in August 2012. In eight months Argentina imported 9bn dollars in energy and exports reached 3.6bn, with a deficit of 5.4bn dollars.

Capital goods imports remained unchanged, intermediate goods were up 8% and consumer goods 11%.

In related news Indec also reported that the Argentine economy expanded at the fastest pace in about two years in the second quarter: 8.3% from a year earlier.

President Cristina Fernandez is fueling growth by boosting spending and subsidies to bolster consumption ahead of congressional elections next month.

However doubts remain. The International Monetary Fund in February censured Argentina for failing to report accurate data on inflation and GDP. Opposition lawmakers publish a monthly inflation report that shows consumer prices rising at more than double the 10.5% rate reported by the government.

Likewise lawmakers opposed to the government released a report based on 12 forecasts by private economists that estimated growth at 5.4% in the second quarter. The economy grew 2% from the first quarter, they said.

Data also indicates that Central bank reserves have fallen to 35.1 billion dollars from about 45 billion a year ago. Argentina posted a current account surplus of 650 million dollars in the second quarter, compared with a revised surplus of 1.2bn a year earlier.

Meanwhile the Peso, whose rate is managed by the central bank, has weakened 15% this year and the gap with the parallel dollar is almost 70%.

23 comments Feed

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1 LEPRecon (#) Sep 24th, 2013 - 08:14 am Report abuse
Ooops. 60% and that's according to INDEC! I wonder what the true figure is?

Not long now before the whole thing comes tumbling down, and CFK is seen legging it to a waiting helicopter, which will whisk her away to her stashed away millions overseas.

If the SCOTUS refuses to hear Argentina's appeal, then it'll be all over sooner, rather than later.

And of course, it is the ordinary Argentine citizen that will suffer, as it is their futures - their pensions that the government has stolen.

But in a democracy you get what you vote for. In future the Argentine public should remember that there is no such thing as a free lunch, and sooner or later someone has to pay. This time it will be them, and their children, and probably their grandchildren.
2 Captain Poppy (#) Sep 24th, 2013 - 09:30 am Report abuse
I agree with everything you said. However, let's also remember in a democracy one also get's who they did NOT vote for....lol. I got Bush and Obama.....joy oh joy for me !
3 ElaineB (#) Sep 24th, 2013 - 10:44 am Report abuse
I would like to elaborate a little more on that comment. I doubt very much that most Argentines voted for what they have now. They voted for the hope the K's offered after a catastrophic crash of the economy. When you have lost everything you cling to the promises of hope, and since there was only one way to go from rock bottom, it must have seemed like the K's were delivering. As many an Argentine has said to me, so what if the government is dipping into the collective pot - they all do it - as long as they 'feel' like everything is getting better and they are benefitting. When you are down and out you only think in the immediacy and not long term.

Even the most supportive of the K's amongst my network of Argentines is now disillusioned with what has happened. So, in a very long-winded way, I am qualifying the fact that they have to take responsibility for voting in the government but it is not now the government they voted for.
4 yankeeboy (#) Sep 24th, 2013 - 11:42 am Report abuse
What the Ks did was not rocket science, they absolved them selves from debt (p (tho prb not in the long run), devalued the currency and stole about U$25B/yr from private entities to plug the hole and keep the subsidies high.
You can only keep the gas petal down for so long until the engine fails.
It failed about 3 yrs ago, when all the U$ was gone out of the private sector. Since you can't steal it 2x.
They'e had a good run. The problem is they've used up 2 generations of future wealth to live well for a decade.
I am anxiously awaiting the outcome of this folly.
I can't wait to see what they do to try to get out of this mess
5 ChrisR (#) Sep 24th, 2013 - 12:19 pm Report abuse
I think we all know what will happen with the electorate.

Half of them will vote for the usual Peronist lies and robbery, the other half (almost) won't bother voting so it will be Peronista scum in power again.

Anybody surprised at the figures given they are INDEC? It looks like they are getting near to 100% collapse to me.

Are we all awaiting SCOTUS with joy? I am because this is just a contract spat and SCOTUS should not accept it, but who knows?
6 ElaineB (#) Sep 24th, 2013 - 01:25 pm Report abuse
@4 I agree it is not rocket science but as we can see from some of the comments from K supporters on here over recent times, they don't understand it. Actually, I would go so far as to say a lot of people in many countries do not concern themselves with the economics of their country. As long as they are doing alright and the future looks positive they don't much care about the detail. Happathy, it is called.

In the case of Argentina you can add nationalism and misinformation to the mix, add a large slug of indifference to corruption and you have a very ignorant electorate. Ignorant of the reality. Argentines - K supporters in particular -were in a state of Happathy for a long time until reality crept up on them.

It is easy for us to say they deserve it and they should have known better but most people in developing countries are just surviving. They might like to give the impression they have it all but they really don't. One of the things I really liked about Argentines when I first got there was the eternal optimism that they could survive anything because they had hit the bottom so many times and somehow survived. It is probably why so many of them act irresponsibly; why live by the rules of society if no one else is and you could lose everything tomorrow.

Just musing..... :)
7 Britworker (#) Sep 24th, 2013 - 01:36 pm Report abuse
We are fast approaching the time when I think they will be capable of doing something stupid like cornered rats. We need a T45 destroyer and a sub permanently in the area for the next 12 months, just in case.
8 yankeeboy (#) Sep 24th, 2013 - 01:50 pm Report abuse
Elaine, You are correct the only think I would add is the lack of hope for future generations.
The perfect example of what has happened generally to the middle class over the last 2 generations is summed up with my friends family. His grandparents came from the Basque country in Spain, they did well bought large tracts of farmland and a had many kids, the father died, the land was stolen by partners and the grandmother raised and educated 5 kids on her own, each kid was successful and well educated.

My friend's dad while he was growing up owned 2 factories and employed a hundred people, my friend grew up with some money, house servants, private schools and trips abroad until the 90s, then his Dad not only lost the factories from the multiple economic crashes, he also was personally responsible to pay the employees and had to sell EVERYTHING, so there was no capital to rebuild, he became a very low paid professor and moved to a very small house.
My friend has a good education, knows the world but unfortunately his 2 siblings are not. One had the luxury of still being around $ and getting an education although she has never traveled but the youngest went to public school and then some public college, now works as a waiter and has a child out of wedlock and gets assistance. All he wants to do is drink, smoke pot and have sex. He is 30y/o and still lives at home.

This is the plight of the typical middle class. His family will never recover the $ or status. The next generation will be less educated and poorer than the previous and on and on it goes.
Until they end up like Bolivia

The only thing that has sustained them is farming and a country can't survive in the modern world with only stuff that grows out of the ground. It is just not possible. The price differential is just too great.

It is a sad place and getting sadder every day.
9 Optimus_Princeps (#) Sep 24th, 2013 - 02:27 pm Report abuse
As if we didn't already know.
10 malicious bloke (#) Sep 24th, 2013 - 03:58 pm Report abuse
Looks bad. We're going to need quite a lot of irrelevant nonsense about school shootings in other countries to deflect from this!

But hey, the only person who can dig Argentina out of this mess (and provide another few years of absolute hilarity) is CFK.

We DEMAND you re-elect this bint, it's worth it just for the case study in “how to utterly destroy an industrialised country inside a decade”, let alone the constant chuckles.
11 Conqueror (#) Sep 24th, 2013 - 04:34 pm Report abuse
@7 I can understand the submarine. In fact, more than one. We need to be able to annihilate “important” parts of argieland. What is the purpose of the Type 45 destroyer? It's an air defence vessel. What will it be defending? What we need is considerable numbers of surface combat vessels. Let's say 6 of them. Destroyers. Then some more frigates. We're losing track. We're building two large aircraft carriers. How much protection do they need? A carrier battle group requires 6 additional vessels. Plus replenishment vessels. Plus, as necessary, assault vessels. Plus more escorts. Britain NEEDS at least 24 escort vessels for its carriers. And more for independent action.
12 Gonzo22 (#) Sep 24th, 2013 - 05:29 pm Report abuse
Wishful thinking again Mercopress?
13 yankeeboy (#) Sep 24th, 2013 - 06:03 pm Report abuse
I have been warning about Rgs devastating their land for a couple years now:
“Argentina is in a critical situation in terms of lack of crop rotation and soil sustainability,” said Maria Fernanda Gonzalez Sanjuan, head of the Fertilizar chamber. The group represents 27 companies that produce, import and sell fertilizers in the South American grains powerhouse.
“Growers are planting too much soy because they want to reduce their risks,” she added. “Soybeans are more resistant to bad weather and government policies in Argentina also favor soy over corn or wheat, both of which are subject to export limits.”
Farmers complain that the limits, which can be raised and lowered through the year, kill competition among buyers and make crop planning impossible.
14 The Truth PaTroll (#) Sep 24th, 2013 - 06:10 pm Report abuse
Nothing funnier than former first worlders “musing” of ignorant “third worlders” when their countries are broke and going “broker” each passing second.

In the UK it's now two generations where one is poorer than the next.

In the USA certainly the current generation is worse off than the last, that is beyond dispute. And most now agree the generation before was worse off than the post-WWII one, only that the effect was totally masked by rampant cheap credit.

LOL, there is nothing funnier than people ignorant and oblivious of their reality thinking it is others who are ignorant and oblivious. Priceless.
15 nota (#) Sep 24th, 2013 - 06:30 pm Report abuse
Quite a statement there Truth patrol...by the way quick question; why do you use different log in? If I compare my father generation, born 1945, outside toilet, no gas central heating, no car, television. Now I own a car, a house, good old central heating I can travel abroad if I wish, have ample money left over to place into investment funds for my son and family. So please explain how I am poorer than the previous generation. Or are you comparing your own circumstances?
16 reality check (#) Sep 24th, 2013 - 06:55 pm Report abuse


Let me guess, you read it?
17 Briton (#) Sep 24th, 2013 - 07:12 pm Report abuse
One would think an argie blogger would agree, rather than try to change the subject,

Perhaps some argie bloggers think all is well,
Some even think she can fly,
Wonders never cease in the land of miracles’..lol

18 yankeeboy (#) Sep 24th, 2013 - 07:12 pm Report abuse
14. Looks like lots of opinion with no facts.
Too bad you'll never know the places your envy so much.
19 Captain Poppy (#) Sep 24th, 2013 - 07:15 pm Report abuse
#16 of course he read it, it's not like the kid has ever been anywhere outside of the dump he calls mendoza.....with the mall they built (snicker) last year and the road they are building this year. He is like Canelo Alvarez taking as ass wupping for Mayweather........and he keeps coming back for more.
20 frenchguy (#) Sep 24th, 2013 - 08:44 pm Report abuse
european and especially french people should learn a lot of things about crazy Argentine economy, but not the things J. Stiglitz/P. Krugman want us to believe : www.didierfaivre.com/2013/09/de-la-reforme-de-la-banque-de-france-en-1973-et-de-lexemple-argentin-ou-michel-rocard-vs-jens-weidmann-2/

(paper soon in English)
21 LuisM (#) Sep 24th, 2013 - 11:32 pm Report abuse
They won´t, most likely, even try to get out the mess. They will do their best just to make it last a bit longer. There seems there not room for “after” on Argentinian minds.
22 Beresford (#) Sep 25th, 2013 - 04:44 am Report abuse
@17. “Some even think she can fly”. Yep, she can: On a broomstick!
23 yankeeboy (#) Sep 25th, 2013 - 12:53 pm Report abuse
The gov't thinks farmers are holding back U$3.5B worth of grains waiting on the massive devaluation everyone knows is coming.
I don't think so
I bet there is a lot less than they think if any at all.

Anyone want to bet AFIP inspectors will get shot at while trying to survey for the grains while on private property?

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