Chile's trade balance now falling yoy

With the exception of January, exports and imports have contracted each month this year on yoy basis and the pace of the trade decline has risen compared with 2014. However, deceleration in exports now outpaces that of imports (at least in dollar terms). As a result, the trade balance's phase of improvement is over. 

With exports declining 16.0% yoy and imports down 15.5% yoy, the trade balance in September is expected to be lower than that in September 2014 (USD390m). Low commodity prices pushed the current account balance down to an all-time low of -3.7% of GDP in 2012 and -3.6% in 2013 as export growth collapsed. The resulting deterioration in domestic demand, particularly investment, led to an even sharper fall in imports in 2014, helping the current account balance to improve remarkably to -1.1% of GDP. 

Import growth has remained under pressure this year and could help a further recovery in the current account in 2015. However, this phase is nearly over, and given that growth is expected to stabilise at around 2.5%, the current account improvement should come to a halt.