The trade balance posted a surplus of USD 4.2 billion in December, above market consensus of USD 1.8 billion, but broadly in line with our call of USD 4.4 billion. The 2023 trade balance improved to a deficit of USD 5.5 billion (from a deficit of USD 26.9 billion in 2022). The narrower headline trade deficit was explained by a lower energy trade deficit of USD 18.5 billion in 2023 (from a deficit of USD 35.1 billion in 2022), reflecting lower energy prices. The non-energy surplus widened to USD 13.1 billion in 2023 (from USD 8.3 billion in 2022). At the margin, using three-month annualized seasonally adjusted figures, the trade balance stood at a surplus of USD 9.2 billion in 4Q23 (from a surplus of USD 1.3 billion in 3Q23). Looking at the breakdown, while manufacturing exports fell by 2.6% qoq/saar, non-energy imports fell by 4.3% dragged by intermediate imports (-7.2%) which are also associated to the manufacturing sector.
Our view: We expect the trade deficit to widen in 2024 to USD 17 billion (from a deficit of USD 5.5 billion in 2023). Our forecast assumes manufacturing exports remain soft, dragged by a slower external demand, while non-energy consumption and investment imports are likely to be resilient driven by a favorable evolution of the internal demand which is supported by an expansionary fiscal stance.
See detailed data below
