The global economic slowdown has harmed the Brazilian exporter, as sales fell 8% in April and showed an increase of only 2% in the first quarter compared to last year. But more than that, the 3% fall in imports last month confirms the weak recovery of the Brazilian economy. The results contributed for the decline in the monthly trade surplus to US$ 881 million.
Foreign purchases of raw materials fell 6.6% when compared to April 2011, indicating the industry’s weaker appetite for raw materials, while consumer goods purchases fell 11% mainly due to lower auto imports. According to LCA’s economist Francisco Pessoa, the April indicators turned on “a yellow light” for everyone in the industry as it moves into the second quarter.
“I said it before and I insist that the first half of this year will be the worst one for the Brazilian industry in terms of international trade,” said Alessandro Teixeira (via Valor), the executive secretary of the Ministry of Development. “Overall I am optimistic that we will achieve our goal of growing exports by 3.1% this year, but it won’t be easy.” The government works with base scenario of slow economic recovery in the US and more stability in Europe. A worsening of the European crisis may lead to a revision of the numbers.
The government considers it premature to attribute the lower imports to the adoption of the IPI import taxes which caused car sales to fall 23%. Although there was sharp decline of Chinese and Korean car imports, US and Europe autos were also harmed due to the accumulation of local inventory.
Teixeira argued that the performance of Brazilian foreign trade was similar to other emerging countries such as South Korea, Chile, China, Argentina and South Africa, which also showed a downward trend in exports in the first quarter.
“There is clearly a trend of falling exports in different regions of the world. The world economy is lagging, there was some recovery in the US but it is not yet clear.”
The United States has increased its purchasing share of Brazilian goods from 9.3% in April 2011 to 10.7% last April. It was the only major market to up its purchases (5.5%) since last year. “The greater the US economy recovery, the greater the Brazilian exports.”
Overall, the Brazilian trade surplus this quarter was US$ 3.3 billion, more than 30% below the 2011 levels.