Commercial Deficit Increases Due to Growing Imports

Mexico increased its exports in July, with non-oil exports growing by 11 percent and oil exports by 104 percent. However, these numbers were shadowed by a 44 percent increase in non-oil imports and a 119 percent on oil imports, leaving Mexico with a commercial deficit of US$4.06 billion for the month.

INEGI’s monthly press release states that “Timely foreign trade information for July 2021 indicates a deficit trade of US$4.06 billion. This balance is compared with the surplus of US$762 million reported in June. The reduction in the trade balance between June and July originated from a decrease in the balance of non-petroleum products.” However, oil exports almost reached the numbers from last year. In 2020, Mexico exported a total of US$17.48 billion of oil. As of July of 2021, Mexico has already exported US$15.56 billion of oil. These numbers are promising, and it remains to be seen if Mexico will reach the US$25.79 billion of oil that the country exported in 2019.

The structure of Mexico’s imports as recorded by INEGI varies from 2020. “The structure of the value of merchandise exports during the first seven months of 2021 was as follows: manufactured goods 88.1 percent, oil products 5.6 percent, agricultural goods 4.3 percent and non-oil extractive products 2 percent.” Oil still represents an important part of the Mexican import market, regardless of recent efforts to develop a stronger renewable energy market globally.

The increase in exports was also highlighted by INEGI: “Exports of manufactured products reached in July 2021, US$35.96 billion, which represented an advance of 10.7 percent at the annual rate.” Manufactured products continued to grow during July, as the country recovers from the economic repercussions of the COVID-19 pandemic. The exports for manufactured products have risen constantly this year, the trend continues to go upward and it remains to be seen if August will also represent a step forward for this industry.

Several industries faced important increases in exports as registered by INEGI. “The most important annual increases were observed in exports of steel products (76.9 percent), food, beverages and tobacco (26 percent), professional and scientific equipment (18.3 percent), electrical equipment and appliances and electronics (17.2 percent).” However, there were also industries that suffered from lay backs: “Exports of automotive products showed a 9.7 percent annual decline, which was derived from a 10 percent decrease in sales channeled to the US and a drop of 8.1 percent in those directed to other markets.” The month of July represented important steps for several industries. However, unfortunately this general growth couldn’t be reflected to all markets.