Chile’s trade surplus is expected to total $2.1 billion in July, down from $2.4 billion in the same month last year, as imports and exports each touch record highs, a Reuters poll showed.
The figure, the median forecast of five economists, would be higher than the June surplus of $1.34 billion. Estimates ranged from a low of $1.75 billion to a high of $2.3 billion. The average forecast was for a surplus of $2.035 billion.
According to the average projection of the economists, exports in July are expected to rise 19.5 percent compared with the same month last year to a record $7.338 billion, while imports are seen up 41.6 percent to $5.303 billion.
“July imports and exports are more exaggerated as a result of the strike at the Port of San Antonio which held back volumes in June and pushed them farther into July,” said David Duarte, an economist with 4CAST in New York.
The estimates would put year-to-date exports at $45.645 billion, up 11.2 percent over last year, and imports at $33.334 billion, up 41 percent, about half of that due to higher volumes and costs for imported fuels.
In the first half of the year the value of diesel imports nearly tripled, after electricity generators were forced to find substitutes for hydro power after last year’s scant rainfall. Improved rainfall in recent months should alleviate demand for diesel in the second half of the year.
The estimated trade figures would put the surplus for the first seven months of the year at $12.376 billion, about 29 percent lower than the same period last year, as an import boom, fueled by growth in consumer, capital and intermediate goods—such as oil—outpaced export growth.
“Non-energy intermediate imports remain very robust so that’s a sign of July being a good month for industrial production,” said Duarte.
“A recovery in copper production and export volumes, along with a rebound in agricultural and industrial exports, should help the export side maintain recent robust growth,” he said.
Chile produces about one third of the world’s copper and strong prices have pushed its trade surplus to record levels in recent years. It is also among the world’s five largest wood pulp exporters.
Recent easing of commodities prices should not have an adverse effect, as lower energy and copper prices cancel each other out.
Analysts say import growth should slow in coming months on improved hydroelectric reserves, while the effect of inflation on consumer spending will also be a factor.
“Import growth remains very strong, but should decelerate gradually over the next few months,” said Alejandro Fernandez of Gemines consultants.
Month-to-month variations in the trade balance may be volatile due to factors such as changes in inventory levels. (Reuters)