By Lisa Flueckiger, Contributing Reporter
RIO DE JANEIRO, BRAZIL – After worries over inflation and a meager GDP outlook for 2013, Brazil’s economy is making headlines again, registering the highest trade deficit in the first seven months of 2013 since collection of such data began over fifty years ago. The balance of trade between imports and exports widened to US$4.98 billion, according to the Ministry of Development, Industry and External Trade (MDIC).
From January to July 2013, exports reached US$135.23 billion, with a daily average of US$926 million. This represents a 4.4 percent decrease compared to the year 2012.
On the other hand, imports soared by 3.4 percent, reaching US$140.21 billion so far and trading an average of US$960 million daily.
Until now, the largest deficit for the first seven months of the year, since the collection of such data began in 1959, had been recorded in 1995 with a shortfall of US$4.22 billion. In the same period in 2012, the trade balance had been positive, with a surplus of US$9.92 billion.
In the month of July alone, the trade deficit reached US$1.89 billion, also entering the history books as the worst result of that month since 1959. Before that, the most negative outcome had been recorded in 1974 and 1997 with a shortfall of around US$550 million.
Reasons for the weak results are attributed to the global financial crisis and the subsequent fall in international trade, as well as a delay in accounting for the imports of fuel and oil-derived products, according to the Federal Government.
Usually, companies have twenty days to report their trade numbers, but in July 2012, the Federal Revenue (Receita Federal) allowed Petrobras a fifty-day period to register the import of fuels and oil derivatives. Therefore, around US$4.5 billion of imports, actually handled in 2012, only made the books in 2013.
Exports that have suffered the most so far this year were crude oil (decrease of 48.9 percent), cotton (30.1 percent) and iron (28.6 percent). Imports of fuels and lubricants – despite Brazil’s vast petroleum reserves – increased by 19.9 percent, capital goods (used to produce consumer products) by 8.9 percent, raw materials by 8.8 percent and consumer goods by 5.2 percent.
Although its growth has slowed considerably, China remains Brazil’s main trading partner, buying US$27 billion in Brazilian products in the first seven months of 2013. The Asian tiger is followed by the United States and Argentina.
In total, last year had ended with a trade surplus of US$19.43 billion, the lowest positive result in ten years. For 2013, economists estimate a further decrease, but a positive trade balance of US$5.7 billion.
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