Central America sees trade deficit widen in first half of 2024

Photo of author

By LatAm Reports Staff Writers

The Secmca notes that the entire region increased the trade deficit during the first half of 2024.

El Salvador and Costa Rica were the countries of the region that least narrowed their trade deficit between 2023 and 2024, according to data from the Executive Secretariat of the Central American Monetary Council (Secmca).

The trade deficit is an operation in which imports from a country occupy a greater weight in the trade balance than the goods it exports. That is, more money comes out of the economies that it enters through the exchange.

According to the Secmca, all the countries in the region bought more than they sold during the first half of the year.

The Secretariat notes that El Salvador reported a drop in exports of 6.7 percent, closing the sixth month of the year with $3,209.36 million of merchandise shipments. On the contrary, imports increased by 0.04 %, from $7,786.28 million to $7.789.18 million.

In detail, statistics shared by the institution reveal that El Salvador went from having a trade deficit of $4.347 million in the first half of 2023, to around $4,579.82 million this year, a decrease of 5.4 percent.

In the first half the region showed an increase in its trade deficit, due to the expansion of imports in most countries, due to the increase in purchases of consumer goods and the oil bill, notes a situation report released by the Secmca in August.

With the exception of Costa Rica, exports from El Salvador, Guatemala, Honduras and Nicaragua were lower than in the first half of 2024 between 0.9% and 6.7 %.

The increase in the gap was less noticeable in the case of the Costa Rican economy, which imported $11,759.64 million and exported $9,684.44 million, generating a difference of $2,072.2 million, 0.04 percent above the deficit of $2,064.4 million that was reported as of June 2023.

The rest of the region

The database points out that Guatemala bought $15,836.16 million in goods and exported $7,468.9 million, generating a trade deficit of $8,367.26. The latter data marks an increase in the gap by 13 % compared to $7,403.74 million in the same period of 2023.

The trade gap in Honduras would have worsened further by 2024 by rising by 16.1 per cent, while in Nicaragua the increase was 60.1 per cent.

According to the report of the Secretariat, higher oil import volumes occurred during the first half of the first half, generating a negative balance of the region compared to the rest of the world.

These fuels would have been used for the supply of thermal plants due to the reduction of hydropower, as a direct result of the influence of the El Niño phenomenon on rainfall in the region.

This article has been translated after first appearing in Diario El Mundo