The current account showed a surplus of USD 0.2 billion in 1Q24, up from a deficit of USD 5.7 billion in the same quarter of 2023, led by a wide goods surplus. The rolling four-quarter balance improved to a deficit of 2.6% of GDP from -3.4% in 4Q23.
The 1Q24 goods trade balance swung to a surplus, from a deficit in 1Q23. Exports increased by 9.5%, driven by higher agriculture sales after a severe drought in same period 2023, while imports plummeted by 23.7 yoy amid a weaker currency and a sharp contraction of economic activity. Thus, the goods trade balance printed at a USD 5.0 billion surplus in the period, up from a deficit of USD 0.4 billion in the same quarter of 2023. The service account deficit fell to USD 1.2 billion, from -USD 2.4 billion one year earlier due to an improvement in the travel account. The deficit for the income balance (net interest bill and dividend payments) widened to USD 4.0 billion, from a deficit of USD 3.4 billion in 1Q23.
International reserves increased by USD 4.1 billion during the 1Q24, mostly reflecting the above-mentioned current account surplus and net disbursements from the IMF. External debt stood at USD 290.0 billion in 1Q24 (47.8% of GDP), up from USD 287.8 billion in 4Q23 (45.5% of GDP).
Our take: We forecast a current account surplus of 1.5% of GDP for 2024, up from a deficit of 3.4% of GDP in 2023. Our call is supported by our expectation of higher exports, due to the normalization of this year’s harvest (after last year’s severe drought), and lower imports, due to the contraction of domestic demand.