Latin American Exports See Modest Growth in Q1 2024 – IDB Report

The value of Latin American commodity exports grew by 1.3% in the first quarter of 2024 compared to the same period in 2023, following a drop last year, according to a report released by the Inter-American Development Bank (IDB) on Tuesday, June 06.

The region’s boost in foreign sales was primarily driven by higher export volumes from South America, as highlighted in the latest Latin American and Caribbean Trade Trends Estimates, which compiles data from the first quarter of this year. In 2023, the value of the region’s exports had fallen by 1.3%.

“The prospects have improved significantly. Looking ahead, the effects of risks to the region’s trade performance appears neutral, although the forecast points to a moderate growth trajectory and a high level of uncertainty,” said Paolo Giordano, lead economist in the IDB’s integration and trade sector and coordinator of the report, in a press release.

The evolution of export performance varied across sub-regions. South American foreign sales entered positive territory despite a drop in commodity prices.

Mexico’s exports slowed down, with expansion driven solely by prices, while Central American foreign sales continued to decline, deepening the downturn that began the previous year.

Pricing

The prices of the main commodities exported by the region showed greater volatility and divergent trends by product.

In the first quarter, year-on-year changes were positive for coffee (36.9%), sugar (8.5%), iron ore (1.9%), and oil (1.0%). Conversely, soybean and copper prices saw negative variations of -20.9% and -5.3%, respectively, compared to the first quarter of 2023.

The report anticipates that although commodity prices are at historically high levels, they are expected to follow a downward trend in the coming quarters, albeit with less intensity than observed last year.

Regional Insights

The IDB estimates that South American exports increased by 1.9% in the first quarter of 2024 compared to the same period in 2023, after an average drop of 4.5% last year. Despite the negative effect on commodity prices, foreign sales volumes in this sub-region saw a significant increase.

Exports from Central America—a region including southern Mexico and the territories of Guatemala, El Salvador, and Belize, as well as parts of Nicaragua, Honduras, and Costa Rica—slowed, with an estimated increase of 0.7% in the first quarter of 2024 compared to the same period in 2023, following an average growth of 2.3% in 2023.

Mexico recorded a 1.7% increase in foreign sales compared to the first quarter of 2023, while Central American foreign sales contracted by 7.1%.

The region’s total imports, which had contracted by 6.3% in 2023, continued to fall in the first quarter of 2024, decreasing by 2.1% compared to the same period in the previous year, albeit at a slower pace.

The report analyzes the export performance of 18 Latin American countries with data available at the time of publication.

Source:Valor Econômico

Access the original news piece at: https://valor.globo.com/brasil/noticia/2024/06/04/exportaes-da-amrica-latina-retomam-crescimento-aps-quase-um-ano-de-contrao-diz-bid.ghtml

Sharing is caring!