Argentina Will Lose US $7.258 Million In Exports This Year

DESPACHANTES ARGENTINOS – The Libertad y Progreso Foundation published a work showing that Argentina will need no less than 9 years to return to the level of exports of 2011.

Since the Pandemic broke out, exports have fallen 5.3% while a drop of 11.1% is expected by the end of this year, which means a loss of US $ 7,258 million.

Both the National Government and the opposition raise the need to grow in exports, although without a clear plan. Much will depend on the decisions that are made from now on, but you could think of three scenarios.

According to the details, the most probable scenario contemplates an average growth of 3% for the next few years. The data comes from the projections for world trade made by the WTO before the pandemic. It refers to a greater dynamism than the pessimistic scenario but less than the optimistic one.

This context takes into consideration: global uncertainty; evolution of the trade war between the US and China and the existence of export duties and other restrictive measures that prevail. However, if these restrictions were to be lifted in the medium term, there would be a recovery in global demand and international prices, putting the optimistic scenario in check.

The pessimistic scenario implies considering the evolution of Argentina’s exports of goods in the last ten years, which would yield an average growth rate of 1.5% per year. Following this projection line, in 10 years we will slightly exceed the levels of 2019.

On the contrary, an optimistic scenario will imply that exports advance at the rate of the recovery observed during 2016-2019, that is, at a rate of 4% per year (it also coincides with the average growth of the 2004-2019 period).

If this scenario materializes, exports would exceed 2011 levels in nine years. However, it must be taken into account that it is a highly optimistic scenario. Also taking into account that the growth rate of exports in the world in the last ten years was 2.2% per year on average, while exports from Latin America and the Caribbean grew at an average rate of 1.8% annual. All of this combines an extremely unlikely expectation.

It is true that Argentina can benefit from exports, but given current restrictions it is highly unlikely. Competitiveness must be restored and measures taken to improve the export position of Argentine companies.

Specifically, export duties must be eliminated as soon as possible; facilitate foreign trade and advance in the opening of new markets. In this sense, the closed and ongoing negotiations that Mercosur has with other markets, for example, the European Union, are instruments that have the potential to boost Argentine exports and that should be promoted by the government.