Rio de Janeiro – Exports from Brazil should be down 15% in 2015 from last year, to US$ 191.331 billion, with imports dropping by 20% to US$ 183.267 billion. The numbers are from the revised trade balance projections issued this Thursday (16th) in Rio de Janeiro by the Brazilian Foreign Trade Association (AEB). AEB chairman José Augusto de Castro dubbed the US$ 8.064 billion surplus projection a “negative surplus,” since it stems from negative export/import data, and foreign sales will not grow. In 2014, Brazil registered a US$ 3.959 billion trade deficit.
AEB’s prior 2015 projections, from December 2014, were US$ 215.36 billion in exports, US$ 207.22 billion in imports, and a US$ 8.14 billion surplus.
“Economic activity originates in bilateral trade, i.e. the sum of exports and imports. The surplus is simply the outcome of those numbers,” Castro said. According to the AEB, at one point, in 2011, Brazil achieved a 1.41% share of international trade, but this year the rate should be 1%. “Or even less,” Castro asserted.
Another downside is the fact that remains primarily a commodity exporter, to the detriment of higher value-added goods. “This year, the top 10 export products are commodities. The eleventh product (aircraft) is the first manufactured good. With commodities, we are dependent on external factors over which we have no control,” the AEB chairman argued.
According to José Augusto de Castro, US dollar appreciation against Brazil’s real benefits manufactured goods sales. “Only this improvement will only take place through selling to the United States,” he said. As per forecasts, overall exports from Brazil to the US should be down 6.3%, with manufactured goods exports going up 5.94%. “The exchange rate is helping manufactured goods exports, because the exchange rate bears no influence at all when it comes to commodities.”
Castro posited that the slumping domestic economy doesn’t help either, because corporations do not invest in technology and innovation, and therefore cannot cut costs. “It is a poor scenario that’s not conducive to a good outlook for 2016.”
*Translated by Gabriel Pomerancblum
