The largest trade deficit with Brazil in five years was reached in March

In March, the trade deficit with Brazil was 

It was due to the effect of the drought that made exports only increase 21%, while imports grew 31% due to greater purchases of cars and auto parts.

A report from the consulting firm Abeceb details that the red in March had a 73.8% jump in relation to the same month in 2022, when the bilateral deficit had been US$ 226 million.

Thus,

.

"This result exhibited

and in a context where the Central Bank is in a delicate situation in terms of reserves, the situation turns on yellow lights," says Abeceb.

Imports grew 31.6% year-on-year and reached

The purchase of "passenger vehicles" and "parts and accessories for motor vehicles" -the two products with the highest share- grew 73.7% and 32.8%, respectively.

Both goods

.

What happened to exports to Brazil?

Exports grew 21.7% year-on-year in March and reached

"Among the products with the highest participation in total exports we have heterogeneous dynamics, with

and an automotive sector that is more than compensating for the drop in agricultural exports," says Abeceb.

The export of "Passenger vehicles" and "Motor vehicles for the transport of merchandise and special uses

, respectively.

Both products were the ones with the highest participation in total exports in March (between the two they accounted for 36.1%), the same as so far this year and in 2022.

Due to the drought, "wheat and rye, unground" -one of the products with the highest participation in exports- showed a fall of 24.5%.

"The impact of the drought can be clearly observed: while this product accounted for 14% of exports in March-22 reaching

, last month it accounted for only 8.7%, with a value of

From the Argentine Chamber of Commerce (CAC) they indicated that the trade between both countries accumulated in the first quarter of the year

.

It is worth noting that exports grew 15.2% in the first three months of 2023 compared to three months of 2022, while imports from Brazil increased 24.3% in the same period.

"Going forward, it is expected that the Central Bank will continue to face an extremely tight exchange market, with a loss of exports that could reach USD 20,000 M due to the drought, and a government that will resist a major devaluation at all costs. Thus,

-something that it has already been doing in recent months-", says Abeceb.

In this context, the consultancy expects that imports from Brazil "will continue to move at a slower pace than last year -as they did in the first quarter-, while exports would remain relatively stable -given the low weight of agriculture and the strong traction shown by the automotive industry-".

for the financing of imports through Banco Nación

will have to be closely followed ; something that, if implemented, could bring some relief to the demand for dollars."

Argentina ranked fourth among the largest suppliers to Brazil

, behind China and Hong Kong and Macao (USD 4,236 million), the United States (USD 3,715 million) and Germany (USD 1,340 million).

In turn, among the main buyers of Brazil, Argentina ranked third, behind China, Hong Kong and Macao (USD 10,978 million) and the United States (USD 3,128 million).

The CAC points out that "the market expectations surveyed in March by the Central Bank of Brazil showed

.

AQ

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