São Paulo – Brasil had record exports in 2011 with sales abroad of US$ 256 billion, boosted mainly by the high price of commodities. This year, the scenery should be less favourable to the country as Europe is living serious financial problems and the economy of the United States has not yet recovered from the 2008 crisis.
A professor at the Economics and Management College of the University of São Paulo (FEA-USP) and president of the Brazilian Order of Economists (OEB), Manuel Enríquez García stated that this year the country should probably not register the same performance as in 2011. He also forecasts high imports, which should affect the performance of the trade balance.
"This year, the total exported should, at the most, equal those of 2011. But the lower sales should be 4% to 5% as against last year, which should result in [an approximate] total of US$ 245 billion. This does not mean that there will be lower imports, so the balance of trade should drop to [a surplus of] US$ 20 billion [in 2011, the surplus was US$ 30 billion]", said Garcia.
In document "Brazilian economy in perspective”, disclosed this week, the Finance Ministry stated that exports last year were record as commodity prices were high and because the number of buyer markets also rose. In total, in 2011, Brazil had a surplus of US$ 29.8 billion. Exports totalled US$ 256 billion and imports by the country reached US$ 226 billion. The main partners were the European Union, China, the Mercosur and the United States.
The Economics Professor at the Pontifical Catholic University of São Paulo (PUC-SP), Antonio Corrêa de Lacerda, also forecasts a difficult year for Brazilian exports. "Brazil is greatly independent of commodities. We are sensitive to demand and price, which represents a risk, as we already have a current account deficit. A deceleration in China may affect the trade balance performance. It would be ideal to export higher value-added products,” he said.
According to Garcia, last year, 47% of Brazilian exports were focussed on iron ore, crude oil, soy, meats, sugar and coffee. In 2006, the participation of these products in exports was just 28.4%. Although Brazil exports manufactured products, he says, productivity in the sector is very low in the country due to the high structural cost [labour charges, taxes and exchange rates, among others].
García says that Brazil should depend on other players to reach the same level of sales recorded in 2011. Brazil depends on recovery of the North American economy and on the growth of China. "While that does not take place, there should be a reduction in demand and prices. It is also necessary for Europe to solve its problems, which I believe should happen this year. Maybe in 2013 there will be a light at the end of the tunnel,” he pointed out.
*Translated by Mark Ament