Argentina’s Milei Poised to Set Trade Surplus Record in 2024 on Grains and Energy Exports

According to a Reuters poll of analysts released on Friday, Argentina is expected to close 2024 with the largest trade surplus in its history. The record-breaking performance is driven by libertarian President Javier Milei’s aggressive push to boost grains and energy exports during his first full year in office.

Since taking office in December 2023, Milei has prioritized transforming Argentina into a net energy exporter, leveraging the vast shale oil and gas reserves in the Vaca Muerta region of Patagonia. Grain exports have also surged, supported by improved weather conditions and the easing of currency controls, marking a sharp rebound for the country’s key export sectors.

Argentina’s Key Role in Global Trade

Argentina is a global leader in agricultural commodities, ranking as the world’s top exporter of processed soy oil and meal, the third-largest corn exporter, and a significant producer of wheat and beef. The country also boasts substantial lithium reserves essential for electric vehicle batteries and growing shale gas and oil production capabilities.

The chart below uses DataLiner-derived data to provide an overview of Argentina’s frozen bovine meat exports in containers between January 2021 and November 2024. Readers may request a demo below.

Frozen Bovine Meat Exports | Argentina | Jan 2021 – Nov 2024 | TEUs

Source: DataLiner (click here to request a demo)

Analysts estimate Argentina’s year-end trade surplus to reach between $18 billion and $19 billion, surpassing the previous record of $16.89 billion set in 2009. Official data shows that the country posted a $17.20 billion surplus from January to November, reversing a $7.94 billion deficit during the same period in 2023. According to the Reuters poll median, the December trade surplus is projected at $921 million.

Challenges Ahead: Trade Surplus Likely to Narrow in 2025

Despite this year’s historic trade surplus, analysts predict a contraction in 2025. While stabilizing under Milei’s fiscal austerity measures, Argentina’s economy is expected to experience rising imports. The peso has strengthened against regional currencies like the Brazilian real, and the Milei administration has eased taxes on various goods, creating favorable conditions for increased import activity.

“From here on out, we’ll likely see a scenario in which imports grow considerably,” said Federico Gonzalez, economist at Empiria Consultores.

The government has also moved to lift anti-dumping restrictions on products like household appliances to combat inflation and reduce consumer prices. While these measures benefit consumers, they are expected to weigh on the trade balance.

Inflation Down, but Trade Surplus to Shrink

Milei’s economic policies have helped bring inflation down significantly, from a peak of nearly 300% in April to close the year at 117.8%. However, the expected rebound in imports, coupled with a recovering economy and adjustments to the exchange rate, could narrow the trade surplus.

“In 2025, we may see the trade balance come in at just 40% of the 2024 surplus,” said Milagros Suardi, economist at Eco Go.

Even with the potential decline in the surplus, Milei’s focus on energy and agricultural exports has positioned Argentina as a key player in global trade, with the potential to sustain economic growth through strategic resource development.

Source: Reuters 

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