Mexico’s Trade Deficit Surges in August Amid Rising Imports and Export Challenges

Mexico’s trade deficit reached $4.87 billion in August 2024, a sharp increase fueled by heightened imports and slowing demand for manufacturing exports. This August figure vastly exceeded June’s deficit of $72 million, according to final data from Mexico’s national statistics agency, Inegi. For the first eight months of 2024, the country’s trade deficit totaled $10.44 billion, up from $8.43 billion during the same period last year.

The widening deficit reflects stronger domestic demand for non-oil consumer goods, while a weaker North American manufacturing sector weighed on Mexico’s manufacturing exports. “Strong domestic demand boosted imports of non-oil consumer goods, while the weak North American manufacturing sector hurt Mexican manufacturing exports,” commented Alejandro Cervantes, head of quantitative research at Banorte.

Oil and Non-Oil Trade Divide

Inegi’s trade data separates Mexican trade into "oil" and "non-oil" categories. Oil encompasses crude oil, natural gas, and petrochemicals, while non-oil includes exports such as vehicles, agricultural goods, and minerals. In August, seasonally adjusted exports fell 2.8% from July, totaling $54.8 billion. Oil exports decreased by 4.1% to $2.25 billion, while non-oil exports declined by 2.7% to $49.7 billion.

Crude exports, valued at $1.72 billion, saw an average price of $72.24 per barrel, down from $74.86 in July and $76.88 in August 2023. Volumes also dropped to 716,000 barrels per day, down from 817,000 barrels in July and 1.11 million barrels a year earlier.

Imports, meanwhile, rose 3.4% in August to $56.8 billion, driven by a 5.4% increase in oil imports and a 3.2% rise in non-oil imports. Banorte analysts anticipate a potential slowdown in imports as costs rise and the export outlook remains uncertain. The depreciation of the Mexican peso since June, from Ps16.31 to Ps19.49 against the U.S. dollar by October 10, could stimulate exports but is likely to dampen import demand, particularly for consumer goods.