Latin American Exports Resume Growth After Almost a Year of Contraction

The value of goods exports from Latin America grew at a year-on-year rate of 1.3% in the first quarter of 2024, after declining in 2023, a new study from the Inter-American Development Bank (IDB) reported.

The boost in shipments from the region responded mainly to the growth in volumes exported by South America, according to the latest update of Trade Trends Estimates for Latin America and the Caribbean, which includes data accumulated as of the first quarter of this year. The value of the region's exports fell by 1.3% in 2023.

“The outlook has improved significantly. Looking ahead, the balance of risks to the region’s trade performance appears broadly neutral, although the forecast points to a moderate growth path and a high degree of uncertainty,” said Paolo Giordano, Principal Economist at the IDB’s Integration and Trade Sector, who coordinated the report.

The evolution of export performance varied at the subregional level. South America's external sales entered positive territory despite the fall in commodity prices. Exports from Mexico slowed and the expansion was driven solely by prices, while shipments from Central America accelerated the downward trend that began in 2023.

Export prices

The prices of Latin America’s main export commodities have become increasingly volatile and are on divergent paths. In the first quarter of 2024, the year-on-year growth rates were positive for coffee (36.9%), sugar (8.5%), iron ore (1.9%), and oil (1.0%). In contrast, soybeans and copper saw negative year-on-year growth (-20.9% and -5.3%, respectively).

The report notes that although prices remain historically high, “they are on an overall downward trend that is expected to continue in the coming quarters, albeit less intensely than in 2023.”

Performance by subregion

Exports from South America are estimated to have increased by 1.9% year-on-year in the first quarter of 2024, following an average drop of 4.5% in 2023. The subregion’s performance was largely explained by the reversal in commodity price trends, while volumes are estimated to have increased significantly.

Exports from Mesoamerica slowed dramatically to an estimated 0.7% year-on-year increase in the first quarter of 2024 after averaging 2.3% growth in 2023. Mexico posted a 1.7% year-on-year increase in foreign sales. In contrast, Central American exports fell by 7.1%.

The value of Latin American imports contracted by 6.3% in 2023 and continued to fall in the first quarter of 2024, albeit at a slower pace (-2.1% year-on-year).

The report analyzes the export performance of 18 Latin American countries using data available up to the time of publication.

Variation in exports value

(Year-on-year growth rate, percentages, 2023 and Q1 2024)