São Paulo – In January this year, the Brazilian trade balance recorded its highest deficit in history for the period and should continue resulting in a deficit up to March. Only then should the result start improving and the year should even end with a surplus. This is the evaluation of economists at the Ministry of Development, Industry and Foreign Trade. Although the country has increased its imports of manufactured goods this year, it was purchases of oil made by Petrobras in 2012 that resulted in a deficit of US$ 4.036 billion in January.
When the negative trade balance results were disclosed, the Foreign Trade secretary at the ministry, Tatiana Prazeres, stated that US$ 1.6 billion in Brazilian imports refer to oil purchases in 2012, but only accounted for in 2013. She said that another US$ 2.9 billion should be recorded in February and March. This was possible thanks to an Internal Revenue Service norm that allows Petrobras to record imports up to 50 days after arrival.
To the president of the Brazilian Foreign Trade Association (AEB), José Augusto de Castro, there is more than the US$ 2.9 forecasted by the ministry to be accounted for in Brazilian imports. “Another US$ 7 billion and US$ 12 billion were left out to assist Petrobras. Had it not been for that, the deficit would have been greater and the organisation would have had to seek funds. The government did that to help Petrobras,” said Castro. The company’s net profit in 2012 was US$ 21.1 billion, 36.3% lower than in 2011.
The president at AEB stated that if imports by the state-owned company had been recorded in the 2012 budget, the trade surplus would not have reached US$ 19 billion, but approximately US$ 12 billion.
The Economics and Policy Professor at Rio Branco Integrated Colleges Carlos Stempnievski says that the “cosmetic work” developed by the federal government is bad for the performance of the trade balance. “The government has been manipulating the figures, which are bad, and did so in Petrobras and in its balance sheets to present a fiscal surplus. It changed the oil import figures for November and December hoping for a solution to be found in the 12 months after. This is reflected in the company figures,” he said.
Other reasons
Both Castro and Stempnievski point out that Petrobras was the main reason for the bad trade balance performance. But there were others. Castro says that in January the trade balance generally presents bad results. However, in January 2012, the situation was not worse than now as there were no “extra” dues by Petrobras and the price of soy was high. Producers, thus, decided to anticipate shipments of the commodity to January, though they traditionally start in March. This was another reason for which the January 2012 deficit was small than that of this year, despite reaching US$ 1.29 billion.
Stempnievski points out that apart from the Petrobras purchases there are other reasons for the trade deficit. “The country is living inflated demand, that is, it is not producing all it consumes and, thus, imports rise,” he said. In January this year, imports totalled US$ 20.003 billion, growth of 14.6% over the US$ 17.44 billion of 2012, or US$ 2.555 billion more.
The two economists forecast that despite the Petrobras cost and the growth of imports, the trade balance will have a surplus this year. Castro forecasts a surplus of US$ 14 billion and Stempnievski states that agribusiness and commodity exports in general should maintain greater foreign sales than imports by the end of the year.
*Translated by Mark Ament
