Argentina trade surplus plunges

Argentina's economy showed signs of weakness in January, posting its lowest trade surplus since March 2001, the national statistics agency said Friday as it also reported solid 4.9 percent growth last year. The trade balance dropped 88 percent to $35 million in January compared with the same month a year earlier, according to INDEC agency figures. Argentina sharply devalued its peso currency in January, losing 18 percent of its value to the dollar, and launched a new index this month that showed a sky-high 3.7 percent rise in prices in January. In the first month of the year, exports fell eight percent to $5.231 billion, while imports dropped four percent to $5.196 million. Energy imports pulled down Argentina's trade surplus, which fell 27 percent in 2013, to $9.024 billion. The trade balance was low despite a 24 percent decline in fuel imports, dropping to $520 million. The fuel imports accounted for 10 percent of all foreign purchases. Argentina depends heavily on a solid trade surplus to help get financing in foreign exchanges, after being virtually shut out of international credit markets since its 2001 default. After a decade of strong growth (averaging eight percent from 2003 to 2011) boosted by soy exports, Argentina's GDP only grew 1.9 percent in 2012. Last year's growth was especially strong from April to September, before dropping to 3.2 percent in October, 2.2 percent in November and 2.7 percent in December, suggesting a further decrease this year. Independent experts have long been skeptical of Argentina's official figures, however. Over the past two years, independent private sector economists have estimated Argentina's annual inflation at more than 25 percent, compared to the government's figure of around 10 percent. In 2012, the International Monetary Fund warned Argentina over its failure to provide regular data on inflation and economic growth through measures that meet the Fund's standards.