Brazil’s Trade Surplus Keeps Shrinking, as Imports Rise

Brazil reported Monday a trade surplus in March of US$4.99 billion, Ministry of Economy said, yet the figure is significantly smaller than the same month a year ago.

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As imports have strongly increased, Brazil’s trade surplus last month fell 22.3 percent from US$6.42 billion a year ago in the same month, although it went up from February’s surplus of US$3.67 billion. 

A trade surplus is an economic measure of a positive balance of trade, where a country's exports exceed its imports, meaning more money is coming into the economy than leaving it. 

Ministry of Economy’s figures also showed that exports totaled US$18.12 billion, down 1.0 percent from March last year, while imports totaled $13.13 billion, up 5.1 percent from the same month last year. 

The data for March showed a 13 percent hike in imports of capital goods, including autos, while commodities exports rose 7.9 percent. While exports of manufactured goods fell 6.5 percent, this shrinking of the trade balance represents a burden on economic growth. 

President Jair Bolsonaro’s administration argues that a reform in the pension system will “unlock” the country’s economic potential, yet as Chile has shown, a privatization model only ends up benefiting the companies and harming the workers.

Almost 55 million Brazilians were living in poverty in 2017, an increase of two million in 2016, according to data released in December 2018 by the official statistics institute of Brazil. The number is equivalent to 26.5 percent of Brazil’s total population and marks a 4 percent rise in one year. 

While Latin America’s largest economy merely grew 1.1 percent in 2018, and last week, Brazil’s central bank cut its 2019 growth forecast to 2.0 percent from 2.4 percent, noting that net trade is expected to shave 0.2 percentage points off overall growth.

Foreign trade secretary Lucas Ferraz said on Monday he expects Brazil’s trade surplus this year to total US$50.1 billion, on exports of US$245.9 billion and imports of US$195.8 billion. Yet it would be some 15 percent down from last year’s surplus of US$58.66 billion, and 25 percent down from the year before that.