Take physic, pomp

Peru’s ImpEx update

Let’s catch up with a bit of macro and see how those Peruvian imports and exports have been doing this year. The last time we did this post was January or February so there’s been a lot of copper sent to China and gold to Switzerland since then.

This first chart shows monthly bars for both imports and exports.

In 2009 exports have recovered somewhat (thanks mainly to the rebounds in copper and gold) but are still well off 2008 highs. Imports have been in the gutter all year, the same levels as 30 months previously. Where’s this “vibrant internal economy” that S&P talked about when affirming its ridiculous investment grade on Peru? IKN calls bullshit on another band of self-righteous, arrogant fools in suits.

The trade balance (below) has therefore gone to the surplus after the iffy moments at the turn of the year, again largely due to the metals rebounds (for the record metals accounted for 59.8% of Peu’s exports in the first six months of 2009, pretty much the average that fluctuates around the 60 mark). This has helped stabilize the currency (PEN) which is good. Export dependent countries with non-reserve currencies can’t spend more than a few months out of surplus before currency weakness starts notching inflation up. In 2009 Peru has inflation nicely under control, happy to say.

So if we add up the imports and exports to show (below) total trade activity with the rest of the world, 2009 has recovered a bit but there’s a country mile between current trade and the numbers being posted this time last year.

The bottom line is that we have a country with a stagnant internal economy that got lucky and has been saved by the metals rebound. No more, no less. Find the Peru Central Bank source report on this link. If this is an economic miracle then Britney Spears’ children were virgin births.

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