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.
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%.