BRASILIA Feb 3 Brazil's trade deficit in
January was the biggest on record, after a rise in raw material
exports failed to offset greater imports of consumer and capital
goods, the Trade Ministry said on Monday.
Brazil's trade deficit of $4.057 billion, a hair wider than
the $4.035 billion gap registered in Jan. 2013, was still
slightly smaller than expectations for a $4.6 billion gap,
according to the median forecast of 17 analysts surveyed by
The trade balance is a serious challenge for Brazil, which
is struggling with weaker demand for its exports because of the
still-subdued global economy. Low productivity among Brazilian
manufacturers, meanwhile, is making their products less
competitive against foreign rivals.
The worsening trade position raises additional concerns
about Brazil's currency, the real, and inflation that is
already running persistently close to the government's target
ceiling of 6.5 percent. As slowing exports and foreign
investment reduce the inflow of dollars to the economy, the real
weakens and in turn makes imports more costly.
Exports of raw materials rose 5.3 percent in January on an
annual basis as crude oil shipments grew 135 percent to $1.1
billion, the trade ministry said. In contrast, semi manufactured
goods retreated 5.8 percent, while manufactured products slipped
Imports in January were marked by an 8.8 percent rise in
consumer goods, a 7.1 percent increase in capital goods, and a
19 percent drop in fuels and lubricants.
Last year Brazil posted its smallest trade surplus in more
than a decade as imports of fuel and consumer goods gained speed
while the value of key export products like soy and corn eased.
Brazilian authorities believe that an improvement in the
economies of the United States and Europe will help exports
rebound this year. An expected increase in the production of oil
and fuels this year will also offset imports of oil derivatives,
officials have said.
However, a steep depreciation of the Argentine peso in
recent days could drag down exports of Brazilian cars and other
manufactured products to its neighbor and key trade partner this