Brasília – The Brazilian processing industry recorded an average reduction of 26% in exports during the first quarter of 2009, in comparison with the same period of last year. According to the document "Radar: Production, Technology and Foreign Trade," published yesterday (23rd) by the Institute of Applied Economic Research (Ipea), during that period, the sectors in which foreign sales decreased the most were vehicles (-51%), wood (-48%), oil and fuels (-41%), leather and shoes (-40%) and machinery and equipment (-34%).
Should the trend of the first quarter be maintained, the Ipea expects a 26% reduction in overall exports and a 4.4% decrease in total domestic production. To the director of Social Studies at Ipea, Márcio Wohlers, “the reduction can be easily made up for by investing in the domestic market,” he said. “And that is what the government has been doing.”
“A significant share of what is produced in Brazil is turned to export. As soon as foreign demand goes down, be it as a result of the international financial crisis or of exchange rate volatility, part of that production may be compromised, leading to undesired consequences for the Brazilian economy," explained Wohlers.
According to him, the government is expecting a lower export reduction rate. Wohlers believes that the decrease should in fact be lower than presented in the study, given the fact that the quarter has been contaminated by the atypical figures recorded in January and February.
“If the export reduction rate is confirmed at 20%, as projected by the government, the rate of reduction would be 3.9%," he said. "But the important thing is to underscore that whether the rate is 3.9% or 4.4%, this is a figure that we are fully capable of making up for, thanks to the Brazilian domestic market.”
*Translated by Gabriel Pomerancblum
