October 1, 2019 / 7:15 PM / 15 days ago

UPDATE 1-Brazil slashes 2019 trade surplus forecast by 25%

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By Jamie McGeever and Marcela Ayres

BRASILIA, Oct 1 (Reuters) - Brazil slashed its 2019 trade surplus forecast by more than 25% on Tuesday after figures showed the surplus shrank in September as exports held steady from the month before and imports rose.

Despite Brazilian goods becoming more competitive on the global marketplace following the real’s 8% slump against the dollar in August, exports failed to rise in September while imports rose by almost $1 billion.

September’s $2.25 billion surplus was less than market estimates of $3.2 billion, half the surplus registered in the same month last year, and the smallest surplus for the month of September since 2014 just as the economy was sliding into recession.

Exports totaled $18.74 billion, little changed from August, and imports totaled $16.49 billion, up from $15.57 billion, the Economy Ministry said. Compared to September last year, the export performance was even more alarming, slumping 11.6%.

The Economy Ministry slashed its 2019 trade surplus forecast to $41.8 billion from $56.7 billion previously, against a backdrop of slowing global economic growth and particular weakness in neighboring Argentina, a major market for Brazilian auto exports.

Exports this year are expected to total $222.2 billion, compared with the previous estimate of $234.5 billion, and imports are now expected to total $180.4 billion instead of $177.7 billion.

All else being equal, a narrowing trade surplus will be a drag on Brazil’s overall economic growth. (Reporting by Marcela Ayres Writing by Jamie McGeever)

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