2015 Chile trade balance to be lower than in 2014

With the exception of first two months, exports have contracted each month this year on a yoy basis, and the pace of the decline has risen compared with 2014. Moreover, deceleration in exports has easily outpaced that of imports. As a result, the trade balance's phase of improvement has ended and the YTD balance until Q3 at bn was lower than that for the same period in 2014 at bn. Based on the forecast of exports declining 10% yoy and imports down 8% yoy, the trade balance in October is expected to be lower than that in October 2014 (USD361m). YTD trade balance should come to bn, against bn in 2014. 


Low commodity prices pushed the current account balance down to an all-time low of -3.7% of GDP in 2012 and -3.6% in 2013 as export growth collapsed. The resulting deterioration in domestic demand, particularly investment, led to an even sharper fall in imports in 2014, helping the current account balance to improve remarkably to -1.1% of GDP. Import growth has remained under pressure this year and could help a further recovery in the current account in 2015. However, this phase is nearly over, and given that growth is expected to stabilise above 2.0%, the current account improvement should come to a halt.