LA’s foreign trade will recover this year; will record surplus: ECLAC

Santiago. Trade in goods and services in Latin America registered greater year-on-year dynamism in the first half, which will lead the region to recover this year from the weak result obtained in 2023, according to a report released this Wednesday by ECLAC.

The Economic Commission for Latin America and the Caribbean reported that the year-on-year increase in the value of shipments in the first part of the year exceeded imports, with increases of 5 percent and 1 percent, respectively. Exports of services rose more than those of goods (11 and 4 percent).

For all of 2024, “the value of the region’s goods exports will grow 4 percent, as a result of a 5 percent volume expansion and a 1 percent drop in prices,” the agency said in its report.

“This good performance is mainly due to the increase in the exported quantities of oil, soybeans and other basic products, while manufacturing exports remain behind and lose weight in the regional market itself in the face of growing competition from Asia,” he added.

The value of regional exports of services will grow in 2024 at double-digit rates (12 percent) for the fourth consecutive year, he noted.

For its part, the value of imports would grow 2 percent this year.

The better performance of shipments of goods and services compared to imports will produce a regional trade surplus this year of more than 36 billion dollars, compared to the deficit of 26 billion in 2023.

The document detailed that the value of shipments from the two largest economies in the region, Brazil and Mexico, would grow 3 percent and 2, respectively.

In the Caribbean, the exported volume would grow 24 percent, driven by the notable increase in the volume of shipments from Guyana (74 percent) and Suriname (12), according to ECLAC. In South America, the increases in the exported volume of agricultural products such as soybeans, corn and wheat stand out.

For its part, the increase in the value of shipments from Mexico and Central America—generally more intensive in manufacturing—is below the regional average, with slight increases in volume and price.

ECLAC projects that the greatest increases in export value in 2024 would occur in Guyana (77 percent), Venezuela (38 percent), Argentina (21 percent) and Suriname (18 percent).

The United Nations agency said that in the January-August period of this year, the price index of the main basic products exported by the region fell 2.1 percent in interannual terms.

“On average, the prices of agricultural products fell markedly, while those of minerals and metals increased, and hydrocarbons had a zero variation. For the full year, a somewhat greater fall (2.9 percent) in the index of prices of basic products,” he noted.

ECLAC considered that service exports could be a new growth engine for the external sector, highlighting that modern services, which can be supplied digitally, grew faster than goods exports between 2010 and 2023.

“To take advantage of the high growth in global demand for modern services, Latin American and Caribbean countries should strengthen productive policies and support programs in collaboration with the private sector,” he noted.