Andrés Randazzo 
June’s trade deficit reached a record US$1.7 billion, meaning Argentina was US$4.4 billion in the red over the first half of the year. Against a backdrop of the potent impact of this year’s drought, private consultancies expect a trade deficit of around US$7 billion for this year.
However, the trend could change in 2024. The Central Bank said earlier this week that “the projection for the trade balance in goods is increasingly showing a surplus for Argentina in the coming years, starting from an expected balance of US$22.4 billion for 2024 and reaching a surplus of around US$41.8 billion in 2030.”
On the basis of data published Wednesday by the National Institute of Statistics and Census (INDEC), sources at consultancy Abeceb said that the trade balance over the coming months “will continue to contract on both the export and the import side, which are sure to end the year with declines.”
“Unless there’s a recovery in exports from an excellent winter harvest and the liquidation of existing stocks, the year will inevitably close with a deficit, which would consolidate currency losses of the order of US$7 billion for 2023 through the trade balance,” the sources added.
“The deterioration of the trade balance won’t be any larger than that thanks to the significant reduction of the energy trade deficit, which will go from -US$4.4 billion in 2022 to a slight deficit of around US$1 billion in 2023, and even a virtual equilibrium can’t be ruled out.”
The improvement in the energy trade balance will be consolidated from next year onwards. Moreover, the effects of the drought will be reversed. This means a positive balance could be on the cards in 2024.
“We’re seeing climate change”
“For next year, we expect a trade surplus, which would be driven by a recovery in harvest levels,” Santiago Manoukian, head of research at consulting firm Ecolatina, told the Herald’s sister title, Ámbito. “It will also be the product of the weather switching from La Niña to El Niño: models are showing that abundant rainfall is coming, which will tend to benefit national production overall.”
“Together with the President Néstor Kirchner gas pipeline coming onstream, that would allow for the reversal of the energy deficit, consuming less dollars on energy imports,” Manoukian continued. “Additionally, demand for imports will be reduced as a product of the exchange rate correction and lower levels of economic activity. All of this will be reflected in a stronger trade balance.”
Soledad Pérez Duhalde, Abeceb’s director of operations, said that “a trade surplus next year could be possible, but we’re seeing climate change around the world, and the usual long-term forecasts are often not met. Climate change is a problem that must be placed on the agenda and addressed.”
“If you analyze the numbers, one could hope that the drought won’t be so intense,” she continued. “There could be at least another US$5 billion-10 billion compared with this year. But the drought is an external factor that nobody can predict.”
“What’s rather surer is the contribution and the added margin that could come from mining, which is gaining traction, and Vaca Muerta. So there are two additional factors,” Pérez said. “And obviously, it’s going to depend a lot on politics, to be able to take advantage of this opportunity. It will surely be a better year, but we can’t definitively rule out that it could be the same or worse, because of what could happen with the weather.”
Argentina’s Central Bank forecasts
Earlier this week, the Central Bank published a study entitled “Projections for the Trade Balance 2024-2030”. Its authors wrote: “A series of forecasts based on sector reports about the dynamics of external trade over the coming years allow us to trace a prosperous path for the dynamics of the future trade balance in goods.”
Regarding the main sectors that could gain traction, the study highlighted that nonconventional crude oil exports are expected to perform well over the coming years. It also mentioned mining exports, which reflect “the fruit of investment in the sector, of projects under way, and others that are planned, to exploit mainly lithium, copper, gold and silver.”
“After the severe drought that affected agricultural production in 2023, exports of the main grains and their derivatives are expected to return to levels of around US$35.4 billion in 2024 and grow slightly to reach around US$37 billion in 2030, on a path of growing volumes and falling prices,” the Central Bank wrote.
“In line with the ‘Productive Argentina 2030’ plan, the remaining exports of goods will grow from US$37.7 billion to US$54.5 billion between 2024 and 2030. The automotive industry and the petrochemical sector will contribute the most to this export growth.”
