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The Lowdown on Brazil: Country Gets First Trade Deficit Since 2001

Boeing imported by TAM January brought Brazil its first monthly trade deficit in almost eight years as exports plunged by a record amount on falling prices for the country's commodities, according to the latest release from the Brazilian Development, Industry and Trade ministry.

The US$ 518 million deficit was the first since March 2001 and the largest since November 2000 and compares with a US$ 2.3 billion surplus in December.

Brazil's exports fell 29% to 9.8 billion USD, the biggest month-over-month drop since 1991, while imports declined to 10.3 billion from 11.5 billion USD in December, the ministry said.

"There's a downward trend in Brazilian exports, with lower demand from traditional markets such as the US and Europe," Trade Secretary Welber Barral told reporters on Monday in Brazilian capital BrasΓ­Β­lia.

Brazilian exports to the US fell 36% in January from a year earlier while sales to the European Union dropped 27.4%. Latin America and the Caribbean bought 37.4% less last month, said Barral.

Imports from the US rose 10.1% in January from a year earlier to US$ 2.01 billion on purchases of medicine, TAM Airlines' acquisition of a Boeing aircraft and shipments of coal.

"The developed countries will only begin recovering from a decline in GDP in 2010," Barral said. "Emerging countries will grow a little, and this will continue to shift Brazilian exports to those countries," Barral said.

Exports of industrial goods fell 29.4% to US$ 6 billion from US$ 8.9 billion in a year earlier. Daily average automobile sales abroad fell 56% to US$ 170 million from US$ 405 million. Beef exports fell 51.8% and crude oil sales sank 44.7%.

The Brazilian Central Bank expects the country's trade surplus to narrow to US$ 14 billion this year from US$ 24.7 billion in 2008.

Trade surplus have been one of the main pillars of Brazil's fiscal equilibrium and strong growth performance. In 2007, the trade surplus was a record US$ 40 billion USD, the strong Brazilian currency, the real, helped soar imports and the surplus almost halved to US$ 24 billion last year.

In related news the Central Bank weekly poll among leading analysts showed that Brazil is forecasted to grow 1.8%, instead of 2%, from the previous estimate.

Similarly the basic interest rate Selic is expected to end 2009 at 10.75%, down from the previous 11%. Consumer inflation is also anticipated will fall to 4.6%, just above the Central Bank target (plus or minus two percentage points).

Mercopress

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  • Show Comments (6)

  • ch.c.

    But….but…but…..
    the minimum wage was upped 12 % starting in February !
    Minimum….minimum….minimum……for all those getting UP TO 8 minimum wages.
    Therefore even those that made Brl 3000.- per month…are getting the 12 % pay rise….provided they were on X times…minimum wages math !
    Not so bad…….in a world meltdown economy.

    Do you think developed nations wages went up by that much ????? NEVER EVER….even in BOOMING TIMES !

    Populism theories work for years….until a few ZEROES are taken OFF their currency !

    The last one was in early 2008 by Chavez the Clown !

    Ohhhhhh I have seen today a picture of a new Zimbabwe cash bill : 10 trillion…..or 10’000’000’000’000
    Just imagine how Bill Gates and Warren Buffett are…POORS !

    πŸ˜€ πŸ˜‰ πŸ˜€ πŸ˜‰ πŸ˜€ πŸ˜‰

  • du48

    Political Paralysis in Brasilia-WHERE IS THE OPPOSITION?
    With Sarney (Dead from the neck upwards,God help us ) and smarmy Temer from PMDB running the court who cares about PT and PSDB, I suppose….Certainly, Lula doesn’t.

  • João da Silva

    [quote]If only CDN PM Steve “Harpy” Harper had those numbers [/quote]

    He better hurry up and hire [i]us[/i] and pay well. We will bring up his popularity rating to 99.99999% in 3 months time. πŸ˜‰

  • jon

    If only CDN PM Steve “Harpy” Harper had those numbers πŸ˜€ πŸ˜€

  • João da Silva

    [quote]The economy is tanking yet the Squids popularity soars…huh???[/quote]

    84% ! πŸ˜€

  • jon

    The economy is tanking yet the Squids popularity soars…huh??? πŸ™‚ πŸ™‚

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