Mexico’s trade balance seems to have improved in September

Mexico’s exports in August had recorded its most robust growth since December 2014, whereas imports had returned to growth for the first time since February 2016 resulting in the further rise in the trade balance on year-on-year basis. The trade balance of Mexico for the month was at a deficit of USD 1.91 billion and has rebounded on an annual basis in each month since April as the domestic demand weakness resulted in a sharper decline in imports, noted Societe Generale in a research note.

Thus the rise in exports and imports figures for the month of August was a positive surprise for the Mexican economy in the midst of ongoing political discourse in the U.S. and its effects on the country’s trade and manufacturing. The trade balance for September is expected to come in at a deficit of USD 684 million, stated Societe Generale.

“Unless the demand shocks from the US change the trade trajectory dramatically, we see the current account balance stabilizing at current lows in 2016 and 2017 before improving over the medium term”, added Societe Generale.