He surplus commercial record of Brazil in 2023 may be difficult to repeat this year, private economists and government officials agree, as falling interest rates are expected to boost imports.
The oil, mining and agricultural sectors of Brazil They have built a solid trade surplus over the last decade that is the envy of many regional peers. However, last year’s surplus grew more than 50% from 2022 to almost $100 billion, due largely to a 12% drop in importssince the value of the exports remained practically stable.
This dynamic is likely to change this year, according to analysts, as investments fixed recover from the 2023 decline due to lower interest rates and large public infrastructure projects attracting private partners.
Data from the last decade show that fixed investments and imports of Brazil They usually go hand in hand. In the third quarter, fixed business investment recorded its fourth consecutive quarterly decline, a sequence last seen in early 2016, when Brazil dealt with one of its worst recessions in history.
The fall of the imports in 2023, together with a higher volume of exports of agricultural and mineral products that offset the fall in prices, raised the trade surplus of Brazil to a record. That helped cut the current account deficit in the 12 months through October to 1.62% of GDP, the lowest since February 2018.
“It seems important… and little discussed that the improvement in the trade balance and the current account is also a reflection of the low dynamism of investments,” he said. Gilberto Borça Jrassociate researcher of FGV Ibre. Even if investments do not increase dramatically, they are likely to rebound in 2024, he added, which could also raise prices. imports.
A government trade official, who requested anonymity to discuss internal forecasts, said the government does not consider the level of the 2023 trade surplus to be structural. Exports are supported by higher volumes, which may be difficult to maintain, he said, while stronger investments are likely to boost exports. imports.
After a year of high borrowing costs, the Brazilian industry expects a more favorable environment in 2024 due to lower interest rates, he said Igor Rochachief economist of the Federation of Industries of the State of Sao Paulo (Fiesp).
After keeping interest rates at their highest level in six years to curb inflation, the Central Bank of Brazil It began a relaxation cycle in August and has already cut its official interest rate by 200 basis points, to 11.75%, and is aiming for further reductions.
Source: Ambito
