After President Javier Milei’s government implemented a significant devaluation of the peso, Argentina experienced a reversal in its trade balance during the month of December.
The INDEC national statistics bureau reported on Thursday that the country experienced a largely negative trajectory in 2023, resulting in an annual deficit of US$6.926 billion by the end of the year.
President Javier Milei’s government implemented a currency devaluation of over 50 percent on December 13th. This decision had a positive impact on exports during the final month of the year, resulting in an excess of US$1.018 billion.
Argentina’s exports in December reached a total of US$5.273 billion, primarily due to strong sales in the agroindustrial sector. However, this figure was 13.8 percent lower than the exports from the same month in the year 2022. On the other hand, Argentina’s imports amounted to US$4.255 billion in December, representing a decrease of 15.2 percent compared to previous months.
In 2023, the government of Milei started implementing measures to loosen the system of foreign exchange and import control. As a result, February marked the final month of that year with a trade surplus.
According to the previous government, Argentina experienced a decrease in international sales in 2023 as a result of a severe drought that severely impacted the agricultural industry, causing a 24.5 percent reduction totaling $66.788 billion. This, in turn, caused a 3 percent loss in the country’s GDP. Additionally, imports also declined by 9.6 percent, amounting to $73.714 billion.
The decrease in value had an impact on the rise of exports, and consequently, the Central Bank had to acquire more foreign currency. As a result, the Central Bank’s reserves, which had already been weakened, fell to $24.3 billion, with an additional $5 billion acquired under the new government.
According to a report from the Central Bank, the projected Argentine trade balance for 2024 shows a surplus over the upcoming years. The report suggests that there will be a balance of US$22.4 billion in 2024, with the surplus expected to reach approximately US$41.8 billion by 2030.
According to the document, the upcoming network of oil and gas pipelines, which includes both existing and under-construction ones, will have a significant impact. It will play a crucial role in reducing the need for imports and is expected to boost fuel exports from an estimated US$10.4 million to US$36.7 billion by 2030.
– TIMES/AFP
