São Paulo – The trade deficit of the machinery and equipment sector stood at slightly less than US$ 1 billion in July, a decline of 22% over the same month of last year. Year-to-date, the balance rate stands with a deficit of US$ 7.4 billion, a decline of 18.6% over the same period of 2014. The data was released this Wednesday (26th) by the Brazilian Machinery and Equipment Association (Abimaq).
According to the organization, the reduction of the deficit results from imports’ decline and not from improvement in exports, which also declined. External sales of capital goods totaled US$ 662 million in July, a decline of 26% in comparison to the same month of last year. From January to July, shipments totaled US$ 4.6 billion, a decline of 18.7% over the first seven months of 2014.
On the other hand, imports totaled US$ 1.661 billion last month, a decline of 23.6% over July of last year. From January to July, external purchases remained at US$ 12 billion, a decline of 18.7% in comparison to the same period of 2014.
According to Abimaq, “the stagnation in exports funding, combined with the foreign exchange rate volatility” are factors that hinder the change in this scenario of decline of external sales.
For the association, the real devaluation against the dollar in the last few months “is caused by political instabilities and external factors”, and this doesn’t guarantee the transformation of the foreign exchange rate in a competitive advantage. With the devaluated real, in thesis, Brazilian goods become cheaper in dollars and, therefore, more competitive in the global market.
In the imports sector, Abimaq says that the decline is “consistent with the recessive environment in the Brazilian processing industry and it should remain throughout 2015”.
*Translated by Sérgio Kakitani
