Between the period 2000 - 2019, the outlook for the Argentine economy displayed an exchange, fiscal and monetary hostility which immersed the country in eight recessions, a depreciation of the Argentine peso close to 600% during the last 5 years and an annual inflation above 50 %. However, the behavior of its trade balance was positive by registering a deficit in only 3 of the 20 years of study, a situation contrary to the trade balance of the automotive sector whose vehicle imports exceeded exports in 17 of the 20 years of analysis, being a critical phenomenon in an industry whose contribution to the industrial GDP is 6.6%. This study seeks to establish which factors at the macroeconomic level have influenced the contractionary behavior of the trade balance of the automotive sector, which is why it was performed an evolutionary analysis of different variables such as real GDP, the ARP/USD exchange rate, total exports and imports of Argentina and exports and imports of the automotive sector. Subsequently, a correlational study was carried out to identify the repercussion of the ARP/USD exchange rate in the level of net vehicle exports and other macroeconomic causes were addressed to specify why the trade balance numbers were mostly negative during the analyzed period. As a result, the depreciation of the peso did not produce an increase in vehicle exports in a developing economy such as Argentina. The high tax burden in the vehicle production chain, the increase in the cost of imported auto parts due to the depreciation of the peso and the commercial dependence on Brazil have created a comparative disadvantage within the sector, where it was more profitable for vehicle terminals to import vehicles instead of producing and exporting them. In addition, the low economic openness of Argentina and the production of vehicle models other than the most demanded SUV models in foreign markets led to the sector being mostly in deficit in the last 20 years.
publication date
August 5, 2021 6:27 PM
Research
keywords
Analysis of the contractionary behavior of the trade balance of the automotive sector
Analysis of the economic effects of the ARP/USD exchange rate
Exchange, fiscal and monetary hostility in Argentina
Exports in Argentina
Imports in Argentina
Macroeconomic causes of negative figures in the registry of imports and exports in Argentina
Trade balance of the automotive sector in Argentina
