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Brazil posts first trade deficit in 8 yrs in Jan |
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Wednesday, 04 February 2009 |
 Brazil posted its first monthly trade deficit in nearly eight years in January, as a global crisis hurt exports more than imports, threatening further damage to the country's current account. Brazil's economy enjoyed ample growth in recent years but is now beginning to slow as the global financial crisis curbs demand for its commodities and dampens consumer appetite.
Brazil's current account fell into deficit in 2008 for the first time
in six years, central bank data showed last week, and some fear it
could worsen amid a global financial crisis.
"The problem has more to do with a fall in external demand than in
prices," Welber Barral, the Secretary of Foreign Trade at the Trade and
Industry Ministry said.
"We are in a year of crisis, 2009 will be a bad year for everyone. The big (challenge) will be to try to keep up our exports."
Brazil is among the world's top commodities exporters.
Brazil had a $518 million deficit in January, compared with surpluses
of $922 million a year earlier and $2.3 billion in December, the trade
ministry said.
The deficit was lower than the $650.5 million median estimate of eight
economists in a Reuters survey. They had expected a deficit ranging
from $900 million to $500 million.
It was the first deficit since March 2001, when imports surpassed exports by $274 million.
Exports fell more than imports in January as a slump in major economies
around the world hampered demand for iron ore and the country's other
top exports.
Exports in January totaled $9.79 billion, plunging 26.3 percent year-on-year and 29.2 percent from December.
The biggest fall was in automobiles and other related products, with
the automobile sector hit especially hard by a squeeze in liquidity as
banks grew reluctant to lend.
The problems in the automobile sector also explained a sharp fall in
both exports to and imports from Argentina, Barral said. Both countries
are automobile producers and sell cars to each other.
Exports fell to all regions in January compared to a year earlier
except in Asia, particularly China, where demand for iron ore and sugar
remained solid.
Imports reached $10.31 billion, down 16.6 percent from January 2008 and 10.5 percent month-on-month.
Barral also said the government was considering more measures to help
exporters: "We have to adopt measures to make Brazilian exports ...
more competitive."
Source: Reuters
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