Brazil cuts trade surplus forecast to USD 55.4 billion

The increase in spending on fertilizers and fuel made the Brazilian Ministry of Economy revise downwards its trade surplus projection (exports minus imports) this year. The estimate fell from US$ 81.5 billion in April to US$ 55.4 billion, a reduction of 32.7%. Every three months, the government releases a new forecast.

The trade balance for this year still has a chance of ending at the second-best result since 1989, despite the downward reduction. Brazil’s biggest ever surplus was last year, when rising commodity prices allowed the nation to export US$ 61.407 billion more than it imported.

According to the Undersecretary of Intelligence and Foreign Trade Statistics of the Ministry of Economy, Herlon Brandão, there are two main factors behind the downward revision of the Ministry’s projections: the drop in the international price of iron ore in recent months and the consequences of the war in Ukraine, which made fertilizers and fuels more expensive.

“What we have seen this year is much higher imports growth than anticipated. Nevertheless, exports are roughly in line with initial projections,” explained Brandão.”The costs of fuel, manure, and fertilizers primarily influenced the trend.”

Both an increase in imports and a slowdown in exports caused the projected balance to decline. The forecast for imports increased from US$ 268 billion in July to US$ 274.9 billion at the present time. On the other hand, the export forecast was revised downward from US$ 349.4 billion to US$ 330.3 billion. Both values will almost certainly reach the ceiling in their respective categories if confirmed.

Impacts of the Ukraine War

The war between Russia and Ukraine has recently impacted Brazil’s trade balance. Due to increased spending on items that have grown more expensive since the onset of the conflict, the surplus achieved last month totaled US$3.993 billion, down 9.3% from September 2021.

International prices of fertilizers rose 47.4% in September compared to the same month last year. The average price of fuel purchased from abroad increased by 53.3% in the same comparison period. Wheat, another product Brazil imports in large quantities from that region of the world, saw prices rise by 58.2%.

Source: Informativo dos Portos

To read the full original article, please go to: https://www.informativodosportos.com.br/governo-reduz-para-us-554-bilhoes-projecao-de-superavit-comercial/

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