South America's exports projected to grow this year

Although trade in South America is expected to recover this year, the pace of growth is likely to underperform other regions of the world.

Exports of merchandise by South American nations are projected to expand 3.2% this year, versus a contraction of 4.5% in 2020, according to the WTO.

Exports from all other regions of the world are forecast to grow at a faster rate, with North America’s expanding 7.7%, Europe’s 8.3% and Asia’s 8.4%, the organization said in a report. 

"South American economies, mainly Argentina, Colombia, Brazil, are not expected to fully recover from the recession that occurred last year," Welber Barral, founding partner of BMJ Consultores Associados and former Brazilian foreign trade secretary, told BNamericas. "The trade of manufactured goods, which is the one with the highest added value and is more linked with trade activity in the region, will be directly impacted by the absence of a full recovery of the economy." 

On the other hand, "demand for agricultural and metal commodities, mainly due to the appetite of Asia, will remain high, but they are products of lower added value, with less impact on the economies of the region," he added. 

South America’s imports are projected to grow 8.1% this year, compared with a decline of 9.3% in 2020, according to the WTO, stressing that the global trade performance will be highly dependent on the advance of vaccines against COVID-19. 

"Keeping international markets open will be essential for economies to recover from this crisis and a rapid, global and equitable vaccine roll-out is a prerequisite for the strong and sustained recovery we all need," said WTO director-general Ngozi Okonjo-Iweala.

The vaccination roll-out in South America, especially Brazil, remains slow as the pandemic rages on, forcing economists to review downward GDP forecasts for the country for this year. 

Economists at Banco Bradesco this week cut their projection for Brazil's GDP expansion this year to 3.3% from 3.6%.