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ECONOMY | 19-01-2024 16:50

Argentina reverses trade deficit after peso devaluation

Trading balance was reversed in December, after the strong devaluation of the peso.

Argentina's trade balance was reversed in December after the strong devaluation of the peso by President Javier Milei's government.

The nation recorded a negative trend almost throughout 2023, closing out the year with an annual deficit of US$6.926 billion, as informed on Thursday by the INDEC national statistics bureau.

On December 13, President Javier Milei's government devalued the peso by more than 50 percent, giving a strong boost to exports the last month of the year, which resulted in a surplus of US$1.018 billion.

Driven mainly by sales in the agroindustrial sector, Argentina’s exports in December amounted to US$5.273 billion (still 13.8 percent less than the same month in 2022) and it imported to the tune of US$4.255 billion (minus 15.2 percent).

February had been the last month of 2023 with a trade surplus, under a system of foreign exchange and import control, which Milei’s Government has started to make more flexible. 

Throughout 2023, Argentina had sales abroad for US$66.788 billion, 24.5 percent less than in 2022 due to a drought which dealt a hard blow to the farming sector and took 3 percent from the GDP, according to the previous government. Imports amounted to US$73.714 billion (-9.6 percent). 

The devaluation affected the increase of exports, and, in turn, the purchase of foreign currency by the Central Bank, whose weakened reserves reached US$24.3 billion, some US$5 billion accumulated during the new government.

The projection of the Argentine trade balance for 2024 is a surplus over the next few years “based on an expected balance of US$22.4 billion for 2024, until an excess near US$41.8 billion is achieved by 2030”, according to a report by the Central Bank.

Following that trend, the new network of the oil and gas pipelines, both built-up and under construction, will be decisive, as they will contribute to substituting imports and will help go from an estimated US$10.4 million in fuel exports to US$36.7 billion in 2030, added the document.
 

– TIMES/AFP

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