Brazil to close out 2014 with a trade deficit
Brazil's balance of trade (exports minus imports) will close out 2014 with its first annual deficit since 2000, according to estimates of the Ministry for Development, Industry, and Foreign Trade (MDIC). According to the head of the Department of Statistics and Export Support of the ministry, Roberto Dantas, an unprecedentedly bad result for November has ruined all chances of closing out the year with a positive bottom line.
There are no exact forecasts as to how much the deficit will be when the year is over. “Typically the December figures are positive, but there's no way we can reverse the deficit we have been accumulating over the year,” he said. The last time the trade balance closed out a year in a deficit was in 2000, when the negative result totaled $732 million.
Between January and November this year, the trade balance has accumulated a deficit of $2.35 billion, the worst recorded for the period since 1998. And considering the falling commodity prices (basic goods traded in the global market) in recent months, Dantas believes the December trade balance will hardly repeat the same results it obtained in past recent years – including a surplus of $2.2 billion in December 2012 and $2.6 billion in December 2013.
Both petroleum production and exports have grown, but price declines have adversely impacted the foreign trade balance in the sector. In November, there was a slight rise in the price of iron ore – the largest share of Brazil's exports – but it was still too short of counterbalancing a 21.1% price decline for the year to date. In the case of petroleum, prices dropped 20% in the past month, offsetting a 9.1% increase in the exported amount.
“One factor that could favor a surplus forecast would be a recovery in iron ore prices, but it did not occur in November. On top of that, there was a reduction in meat exports, especially to Venezuela and Saudi Arabia,” Dantas noted.
The economic crisis in Argentina was the main factor that led to smaller manufactured exports. From January to November this year, manufactured goods sold 12.4% less compared to the same period of 2013 on a daily average. In terms of revenue, the loss was as bad as $10.7 billion.
The overall exports accumulated a 5.7% decline from January to November on a daily average compared to the same period last year. High dollar prices have also discouraged imports, but not as badly: imports declined 3.9% in the period. “Stronger dollar prices would obviously have to affect demand in some way,” Dantas said.
Translated by Mayra Borges
Fonte: Brazil to close out 2014 with a trade deficit
