Macro June 26, 2020 / 11:54 am UTC

Mexico: May Trade Balance Surprises on the Downside

By Pedro Tuesta

Mexico's trade balance for May surprised on the downside, coming in at –$3.5 billion. The surprise was that imports fell less than expected, which suggests Mexico replenished some intermediate and capital goods in May on expectations of the economy re-opening in June. However, the re-opening did not happen and exports will continue to drop, which will lead to a larger fall in imports, as inventories are already stocked up. 

The print underlines the strong interrelation between imports and exports, and the market hopes for a quick resumption of economic activities, with the industry in the U.S. driving a rebound. However, the pressure to re-open the economy looks like it could backfire.

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I, Pedro Tuesta, the lead analyst certify that the views expressed herein are mine and are clear, fair and not misleading at the time of publication. They have not been influenced by any relationship, either a personal relationship of mine or a relationship of the firm, to any entity described or referred to herein nor to any client of Continuum Economics nor has any inducement been received in relation to those views. I further certify that in the preparation and publication of this report I have at all times followed all relevant Continuum Economics compliance protocols including those reasonably seeking to prevent the receipt or misuse of material non-public information.