Argentina trade surplus widens 30pc

BUENOS AIRES, Nov 23 (Reuters): Argentina's trade surplus widened 30 per cent in October from a year earlier to $1.22 billion, marking the second straight month of expansion after several months of declines, the government said Tuesday. October's figure was slightly above the $1.21 billion surplus announced by President Cristina Fernandez earlier this month. In October 2010, Argentina's trade surplus totalled $937 million. Argentina is growing at one of Latin America's fastest rates, stoking strong demand for imported goods, and the trade surplus has shrunk in the last year as import growth outpaced that of exports. A surge in purchases abroad led the government to increase import hurdles this year to protect the trade surplus, an economic policy pillar of Fernandez, who won a landslide reelection on October 23. Some economists say the protectionist measures have helped prop up the trade surplus, which shrank 16 per cent in January through October compared with the same period of 2010. Last month's figure "is the result of government controls on imports, whether through import permits, anti-dumping measures or pressure on big companies to match imports with exports," said Mariano Lamothe, chief economist at consultancy Abeceb.com. In Argentina, importers of Porsche cars are exporting wine to comply with an export-for-imports swap policy aimed at boosting local industry and shielding the trade surplus. Exports in October soared to $7.53 billion, a 28-per cent jump year on year, driven by shipments of grains and oilseeds as well as industrial goods, the INDEC statistics agency said. Imports were up 27 per cent at $6.31 billion, led by intermediate goods, followed by fuels and lubricants, the INDEC said. Argentina's trade surplus should reach $9.5 billion next year, above the estimate given in the government's 2012 budget bill, Economy Minister Amado Boudou said last Monday. Exports have been rising due to high global commodities prices and Brazilian demand for Argentine cars, although imports have increased at a faster pace due to strong local demand and high inflation. Import growth eased in September, however, prompting the trade surplus to widen 3.2 per cent from a year earlier and mark the first such expansion since March. Surging inflation, estimated at about 25 per cent a year by private analysts, makes imports relatively cheaper by raising local production costs. Argentina's large trade surpluses in recent years have allowed the central bank to accumulate foreign currency reserves, which the government uses to pay debt.