Wednesday, September 12, 2018

India’s exports to Latin America keep increasing...

  
India’s exports to Latin America increased by 16% in 2017-18 ( April to March) reaching 12 billion dollars from 10.38 billion in 2016-17, according to the Commerce Ministry of India.

India’s exports of 160 million dollars to the distant and small Uruguay  (15000 km away; population 3.4 million) is more than the exports of 133 million to Uzbekistan which is 3000 km from Delhi and has a larger population of 31 million.

India’s exports of 292 million dollars to the distant Guatemala is more than the exports of 133 million to the neighbourly Cambodia.

India exports more to Central America ( 956 million dollars) than to the Central Asian Republics ( 365 m) although the latter is closeby and has more population.

India’s exports to Mexico ( 3.78 billion) are more than the exports to Iran(2.65 bn), Thailand(3.65 bn), Russia(2.13 bn), Canada(2.5 bn)or Egypt(2.4 bn)

Latin America remained as the leading destination for India’s exports of vehicles which reached 3.76 billion. Mexico continued as the largest market for India’s vehicle exports with 2.02 billion.

Mexico continued its position as the top destination in the region after having overtaken Brazil in recent years. 

India’s exports and imports in 2017-18 ( in million dollars) are in the table below:

 country
exports
imports
Total trade
Mexico
3783
3930
7713
Brasil
3064
5498
8562
argentina
709
2229
2938
Colombia 
939
593
1532
Peru 
761
2377
3138
chile
764
2092
2856
Venezuela 
79
5866
5945
ecuador
280
194
474
Bolivia 
105
667
772
paraguay
168
167
335
uruguay
160
25
185
panama
227
43
270
guatemala
292
16
308
Dominican republic
197
646
843
Costa Rica
134
67
201
honduras
146
13
159
El salvador
70
9
79
nicaragua
87
4
91
Cuba 
42
2
44




Total
12007
24438
36445

  
India’s main exports ( figures in million dollars)
vehicles
3759
Equipments and machinery
1007
Organic chemicals 
973
Iron and steel products
805
pharmaceuticals
779
Chemical products
630
Synthetic fibres
635
textiles
591
Plastic products
483
cotton
363
dyestuff
327
Rubber articles
243

Major destinations of vehicle exports: Mexico-2027 million dollars, Chile-284 m, Brazil-278 m, Colombia-255m, Peru-218 m, Argentina-142 m, Guatemala-98 m, Ecuador-75m, Costa Rcia-66m and Bolivia-59m

Major destinations of pharma exports: Brazil-229 million dollars, Chile-65m, Colombia-55m, Venzuela-55m, Peru-40m, Dominican Republic-35m, Guatemala-32m and Ecuador-32m

India’s major importsin million dollars

Crude oil
10490
gold
3663
copper
3007
Vegetable oil
2649
Raw sugar
920
Equipments and machinery
861
aircrafts
464
Wood pulp
503
Iron and steel
350

Gold imports which started three years back have increased steadily reaching the second position last year. The raw sugar is imported from Brasil for refining and reexports. Peru was the top supplier with 1.78 billion dollars, followed by Bolivia-663 million, Dominican republic-584 m, Colombia-308m, Brazil-289m and Mexico 37m

Venezuela continued to be the top source of imports of crude oil with 5.86 billion dollars, followed by Mexico-2.77 bn, Brazil-1.56 bn, Colombia 177 million and Ecuador 85 m.

Chile maintained its position as the top supplier of copper and Argentina as major supplier of soy oil

Trade

India’s trade with Latin America increased to 36.44 billion dollars in 2017-18 from 30.04 billion in the previous year. The imports will go up significantly in 2018-19 due to the higher prices of oil, the main import from the region. 

India’s exports will increase slightly in 2018-19, given the subdued GDP growth of 1.5% in 2018. Argentina is expected to suffer a small GDP contraction, Venezuelan GDP is projected to go down by 10%

Saturday, September 01, 2018

Latin American economic growth is going to be more subdued in 2018


Latin America’s GDP growth rate is projected at 1.5% in 2018, according to the August 2018 economic survey of ECLAC (UN Economic Commission for Latin America and Caribbean). This is less than the growth of 2.2% predicted in April 2018. The region’s mild growth is being helped by the recovery in domestic demand and moderate increase in the prices of commodities.

South America’s growth rate would be 1.2% in 2018;  Central America’s 3.4%; and Mexico’s 2.2%. The only exception to regional growth is Venezuela whose GDP is expected to shrink by  10% in 2018 after the contraction of 12% in 2017. 

Total GDP of the region has come down from the peak of 6.25 trillion dollars in 2014 to 5.7 trillion in 2017.

Average inflation of the region which was 5.7% in 2017 is likely to go up marginally to around 6% in 2018. Exception is Argentina with a continuing high inflation rate of 29%.  Venezuela, has stopped publishing inflation figures. According to ECLAC the Venezuelan inflation has skyrocketed from 302% in 2016 to 2,582% in 2017 and more in 2018.  But IMF and others put the hyperinflation in five figures.

The average urban open unemployment rate of the region in 2018 is 9.2%, as against 9.3% in 2017.

Latin America’s exports have declined to 445 billion dollars in the first six months of 2018 from 573 billion in the same period in 2017. The imports have also decreased to 434 billion in the first six months in 2018 from 444 billion in the corresponding period last year.

Gross external debt of the region stood at 1.8 trillion in 2017. This means an external debt to GDP ratio of just 41% in 2017.  This is a healthy situation and in any case much better than many developed economies and some emerging markets in other regions. Most of the countries have comfortable foreign exchange reserves and the region’s total forex reserves was 852 billion dollars in June 2018. Again, Argentina and Venezuela are outliers. Argentina has just requested IMF to prepone the release of the second instalment of 50 billion rescue package. Venezuela’s reserves of 8.5 billion dollars is dangerously inadequate. 

The region had received 134 billion dollars of FDI in 2017. Almost half of it went to Brazil, followed by Mexico-26 billion, Argentina-10, Colombia-10 and Peru-6.5.

Colombia is the most promising market in the region upbeat with a new president who has a fresh start after the end of the FARC guerrilla war. About 40 percent of the country which was under FARC control at one time has now been liberated. This means new investment in agriculture, mineral exploration, industries and infrastructure.

Mexico has survived the threats and bullying of Trump. His administration has just concluded a FTA with Mexico which is a great relief for both the markets.

Brasil will hold elections amid continuing political uncertainties. The economy has tentatively recovered from the recession of 2015-16. In any case, the worst is over. 

Argentina, despite the market-friendly Macri is facing high inflation, rapid currency depreciation and low growth. The IMF rescue will give temporary relief but the country is in for some more pain.

Venezuela stands out as the hopeless one in the region with political turmoil, economic disaster, hyper inflation, shortage of essential items and breakdown in public services. Over a million Venezuelans have escaped the misery by emigrating to other countries in the region. It is ironical. In the past Venezuela had given asylum to exiles from other Latin American countries under repressive military dictatorship. More than a million Colombians as well as Peruvians and Bolivians used to emigrate to the then prosperous Venezuela for work. Now it is the other way. 

ECLAC is the knowledge partner of CII in the forthcoming India-Latin America Business Conclave to be held in Santiago, Chile on 1-2 October 2018