São Paulo – Brazil’s Foreign Trade Association (AEB) revised up its 2018 export forecast. It said this Tuesday (24) that foreign sales could fetch USD 224.445 billion, up 3.1% from last year. An earlier projection from December 2017 was for 1.1% growth.
AEB president José Augusto de Castro said the revision owes itself to the oil price hike during the first half of the year, the soy crop failure in Argentina, the hike in fuel oil prices, and the sale of oil rigs.
Conversely, the AEB’s import outlook moved down slightly. It sees imports to Brazil amounting to USD 168.13 billion, up 11.5% from 2017. The original forecast had been for an 11.7% increment.
An AEB statement quoted Castro as saying the revision came as a result of the fact that Brazil’s 2018Gross Domestic Product (GDP) growth itself has been revised down to 1.5%.
If the numbers prove true, Brazil will see a USD 56.315 billion trade surplus, down 15.9% from 2017. The original estimate had been for a 23.1% drop. “Though narrower, this is arguably a robust surplus that can be celebrated, while keeping in mind that it will come despite low export and import volumes.” Castro said according to the AEB. He said Brazil’s share of global trade will remain at 1.1%.
The association adds that bilateral trade, i.e. exports plus imports, could reach USD 392.575 billion for Brazil this year, which is stronger than 2017’s USD 368.499 billion, but much lower than the all-time, which was USD 482.292 billion, in 2011.
Castro also said exports of finished goods are stagnant and will fall short of 2007 levels, especially as a consequence of economic crisis in Argentina, the primary buyer of industrialized goods from Brazil.
He stressed that variety has decreased when it comes to Brazil’s exports, with commodities like soy, oil and iron ore making up 30.5% of what the country trades. “Right now, out of Brazil’s ten top-selling goods, nine are commodities and just one, automobiles, is a finished good,” the AEB statement quoted Castro as saying.
Translated by Gabriel Pomerancblum
