Exports: the factors that explain 2022 record numbers and predict more progress in 2023

Agriculture, industry, energy, the knowledge economy and mining were economic engines whose performance could keep improving. The government is committed to increasing the presence of Argentine products in Latin America and the Caribbean. They promote a commercial promotion plan and a set of laws in Congress.

Once official statistics are released, they will confirm that 2022 ended with record exports, which exceeded US$100 billion. Prices influenced this phenomenon, but so did the quantities. Agriculture, industry, energy, the knowledge economy and mining were key drivers that could continue to improve their performance in 2023. Thus, the government aims to top the numbers from last year, despite the drought.

The world has changed. In an interview, the head of the United Nations Economic Commission for Latin America and the Caribbean, José Manuel Salazar Xirinachs, described the current situation as a “cascade of crises.” Before the effects of the pandemic on the supply had been brought under control, Russia invaded Ukraine. We can still feel the main consequences: scarcity of commodities, inflation, higher rates and the threat of a global recession.

This complex scenario brought difficulties to the local economy, especially in terms of inflation and energy imports. In fact, Economy Minister Sergio Massa submitted a report to the IMF detailing that the escalating war cost Argentina some US$5 billion in 2022. But the international context also provides a great opportunity.

The agro-industrial sector saw record prices for all the exports of the soybean, corn and wheat complex. Despite difficulties finalizing sales in the first half of the year due to tensions with the currency exchange gap, they became an engine that represented more than 45% of total foreign sales.

The world demands food. The sector’s future challenge relates to the ability to accelerate investment, increase the offer and add value in order to seize the opportunity. Official sources revealed that the government plans to hold special Congress sessions to discuss a bill written with the consensus of the Agroindustrial Council granting tax benefits to investments and to those who add value to their products domestically.

According to data from the Foreign Ministry, exports grew by 15.3% in the January– November 2022 period, compared to the same period in 2021, and exceeded the previous record, which was set in 2011, by 7.2%. According to the last report by INDEC (National Institute of Statistics and Census) that collected data up to October, there were record numbers in prices, but also in volumes. Exports of industrially manufactured goods grew by 19.3%, with an increase of over 5% in export volume, and registered the highest value since 2013.

The auto sector made a decisive contribution to the industry. Toyota president, Gustavo Salinas, highlighted the company’s performance, which led to the incorporation of a third shift for the first time in 25 years. In addition to a projected improvement in next year’s indicators, he noted that foreign destinations represent 83% of the company’s market and that by 2023 they expect to maintain a similar balance “with more than 80% for export.” Other manufacturers such as Ford, Renault and Volkswagen have ongoing investments to improve their export capacity.

The contribution of the oil sector was also relevant –exports doubled in 2022. There was an increase in both prices and volumes exported. The main destinations were the United States (30.7%), Brazil (15.4%) and Chile (11.4%). Thanks to Vaca Muerta and the Néstor Kirchner gas pipeline, energy is expected to reach a similar weight to agribusiness in the coming years. The Executive is also preparing two bills for Congress’ special sessions: one for the installation of an LNG plant and its commercialization and another to develop hydrogen production in the country.

Knowledge-based services set a record. They exceeded pre-pandemic levels by 17% with strong growth in business services (29% year-on-year) and telecommunications, computing and information (15%). The government hopes for a new export leap in 2023 thanks to a project that seeks to bring onto the official books part of the activity that currently flows in an informal circuit due to the currency exchange gap.

The year that has just finished was also the year of lithium, whose exports between January and October tripled compared with the same period in 2021. Mining –one of the sectors that today attracts the highest level of investment– has been growing at a rate of 30 % year-on-year for shipments of gold, silver, copper and lithium. In the next twelve months the activity’s growth is expected to continue.

Facing 2023, Foreign Minister Santiago Cafiero launched the National Export Promotion Plan. The initiative contemplates carrying out 305 external trade promotion actions, 80 missions, 60 sector positioning actions and attending 130 international fairs. The focus will be on increasing the presence of Argentine products in Latin America and the Caribbean. Government estimates anticipate a new export record that would be around US$105 billion despite the effects of the drought.

Originally published by Ámbito.com / Translated by Agustin Mango


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