Latin American exports to China would drop 21.7%

Exports from Latin America and the Caribbean will fall 21.7% in 2020 at an annual rate, ECLAC projected.

With this, China would be the destination of regional external sales that would have the greatest impact for COVID-19.

This would especially affect products with forward linkages in the value chains within that country (iron ore, copper ore, zinc, aluminum, soybeans, soybean oil, among others).

At the same time, the most exposed countries are: Argentina, Brazil, Chile and Peru, the largest suppliers of these products for China in the region.

The COVID-19 crisis may have an impact on the performance of Latin American and Caribbean exports, also due to its effect on the imports used to produce exports.

Latin America and the Caribbean: effects of COVID-19 on exports of goods to the world and to selected partners, forecast for 2020

Mexico and Chile would be the countries most exposed to a drop in the supply of China, which supplies around 7% of its intermediate inputs. Colombia and Peru follow, importing from China 4.5% and 5% of their intermediate inputs, respectively.

Mexico is the country most exposed to changes in supply and demand conditions in the United States, especially in the manufacturing sector.

Costa Rica is also very exposed to the economic conditions of the United States, since around 10% of its GDP depends on the supply and demand of that country.

Latin American exports

The countries most exposed to changes in supply and demand conditions in the European Union are Chile, Mexico and Brazil, since around 5% of their GDP depends on the added value of the services and manufacturing sectors in that market. .

At the subregional level, the greatest impact will be felt by the countries of South America, which specialize in the export of primary goods and, therefore, are more vulnerable to the decrease in their prices. On the other hand, the value of the exports of Central America, the Caribbean and Mexico would register a smaller fall than the average of the region, due to its ties with the United States and its lower exposure to the decrease in the prices of primary products.