Brazilian exports expected to grow 5.4% despite global slowdown, says FGV report

Despite a slowdown in global trade, Brazilian exports are projected to surge by 5.4% in 2023, according to the Icomex (Foreign Trade Indicator) report released by the Getulio Vargas Foundation (FGV) on Wednesday (21). In 2022, the country experienced a 4.4% growth in sales to foreign markets.

While the global trade of goods is expected to grow at a slower pace this year, with the World Trade Organization (WTO) forecasting an increase of 1.7% in 2023 compared to 2.7% in 2022, South America is projected to experience an even weaker growth rate, going from 1.9% to 0.3% in the same period.

“Brazil is the largest economy and exporter in the region. Among the top 30 global exporters in 2022, Brazil is the only South American country on the list, ranking 26th with a share of 1.3% in world exports. Consequently, the export forecast in the region is heavily influenced by Brazil’s performance,” the Icomex report highlights.

Between January and May 2023, Brazil’s export volume increased by 9.3% compared to the same period in the previous year. The comparison between 2022 and 2021 also showed a 0.6% increase from January to May.

“Hence, the results suggest that the WTO’s forecast of a deteriorating situation in the region should not apply to Brazil. Argentina, on the other hand, continues to experience a decline in sales to the European Union. Barring any unforeseen events, the data indicate that the volume of exports in 2023 will grow more than in 2022,” projects the FGV.

Brazil’s trade balance surplus reached a record $11.3 billion in May. In the accumulated result for the year from January to May, the surplus amounted to $34.9 billion. Export and import prices in May continued to decrease compared to the previous year, but there was an increase in volume.

Let’s take a closer look at the data on Brazilian exports via containers gathered with the aid of the DataLiner maritime intelligence service:

Brazilian containerized exports | Jan 2019 – Apr 2023 | TEU

Source: DataLiner (click here to request a demo)

In May 2023, export prices experienced a decline of 13.4% in Brazil compared to May 2022, while the volume saw a significant increase of 28.4%. Similarly, import prices decreased by 13.7% in May 2023 compared to the same month last year, but import volume grew by 1.8%.

From January to May of this year, export prices dropped by 4.6% compared to the same period in 2022, but the volume of exports increased by 9.0%. Import prices decreased by 3.9% in the cumulative results for the year, with a decrease in import volume of 0.7%.

The volume of commodities exported by Brazil experienced a notable growth of 36.0% in May 2023 compared to the same month in 2022, while non-commodity exports increased by 4.8%. Regarding imports, the volume of commodity purchases rose by 12.5% in May this year compared to May last year, and Brazilian purchases of non-commodities increased by 0.6%.

“It is observed that non-commodities account for around 90% of Brazil’s total imports,” reflects the FGV.

The Icomex report also reveals a 63.9% increase in the imported volume of agricultural capital goods from January to May 2023 compared to the same period in 2022. For the industry sector, the acquisition of imported capital goods has seen a 10.9% increase in the year.

From January to May 2023, Brazil exported more in terms of value to Argentina (26.9%), China (8.1%), and the United States (4.1%) compared to the same period in the previous year. Conversely, there has been a decline in exports to the European Union, with a decrease of 6.2%.

Source: R7

To read the original news report, see: https://noticias.r7.com/economia/exportacoes-brasileiras-devem-crescer-54-em-2023-apesar-de-desaceleracao-mundial-diz-fgv-21062023

Sharing is caring!