[010417.EN.BIZ] Brazil Posts Record US$47.7 Billion Trade Surplus as Imports Fall 19.8pc

BRAZIL's trade ministry date showed the nation's largest annual trade surplus on record as recession smothered domestic demand in Latin America's largest economy, Bloomberg reports.

The country's trade surplus rose to US$47.7 billion last year compared to $19.7 billion in 2015. Imports fell 19.8 per cent from a year earlier to $137.6 billion, while exports fell 3.1 per cent during the same period to $185.2 billion.

Brazil's trade balance has jumped as high unemployment and falling investments prolong the country's economic downturn and undercut imports.

Meanwhile, even a decline in the currency, which hovered near a record low at the start of 2016, failed to result in an annual increase in exports. In the past month, analysts have increased their trade surplus forecasts for this year to $47 billion while cutting growth estimates in a sign that an export-led recovery may not materialise.

Imports have collapsed under the weight of Brazil's worst recession on record, which has seen gross domestic product contract for seven straight quarters. Over 12 million workers are out of a job, and above-target inflation has corroded real wage growth.

Brazil expects to post a similar trade surplus in 2017, of between $47 billion and $48 billion, Trade Secretary Abrao Neto said. A return to growth in Brazil this year, alongside improvement in the economies of the country's main trading partners, should result in increased exports and imports, he said.

Source : HKSG.