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Latest Forecast for Brazil Growth this Year: 0.52%

Brazilian economyThe projection of financial institutions for growth of Brazil’s Gross Domestic Product (GDP) has declined even further as a result of technical recession in the country. According to a poll of banks conducted by Brazil’s Central Bank, the GDP should be up 0.52% this year.

The expected rate has been revised down for the 14th straight week. Inflation is expected to be 6.27%, same as last week. The forecast for the benchmark interest rate (Selic) has also remained flat, at 11%.

The dollar is expected to be worth R$ 2.35 by the end of 2014, as per financial institution’s estimates.

Trade Balance Up

The Brazilian trade balance posted a surplus for the sixth straight month in August, driving the year-to-date result to a surplus for the first time this year. In August, exports amounted to US$ 20.465 billion and imports, to US$ 19.297 billion, resulting in a US$ 1.168 billion surplus.

Year-to-date through August, exports stood at US$ 154.02 billion and imports, at US$ 153.771 billion, resulting in a US$ 249 million surplus. The figures have been released this Monday (1st) by the Brazilian Ministry of Development, Industry and Foreign Trade.

This, however, does not imply that exports increased and imports declined. In August alone, both imports and exports were up by a meager 0.1% from August 2013, based on daily average figures. Year-to-date through August 2014, average daily exports were down 0.5% from August 2013, and average daily imports were down 3%.

According to the Ministry, the only product category for which exports increased was manufactured goods (up 3.8%), the highlights being an oil rig, flat-rolled steel products, fuel oils, cast iron pipes, aluminum oxides and hydroxides, plastic polymers, land levelers and medicine.

Basic goods exports were down 3.3% in August, driven by maize, iron ore, soy and tobacco. Conversely, exports increased for cotton, coffee, petroleum, soy bran, copper ore, beef, poultry and pork.

Exports of semi-manufactured goods were down 1.8%, driven by raw sugar, wood pulp and raw aluminum. Exports increased for semi-manufactured iron and steel products, ferroalloys, crude soy oil, leathers, cast iron and semi-manufactured gold.

Region-wise, exports from Brazil increased to Eastern Europe, the Middle East, Latin America and the Caribbean. Exports to other areas declined.

Imports

Imports increased for fuels and lubricants (30.6%), and decreased for consumer goods (8.2%), capital goods (7.3%), raw materials and intermediate goods (1.1%).

Brazil stepped up its imports from the Middle East (213.8%) and Africa (56.8%), highlighting petroleum and its products, fertilizers and other chemicals. Imports from all other regions declined.

Output Up

Brazil’s industrial output was reported to grow 0.7% from June to July. This is the first increase after five months on the wane, according to the Monthly Survey on Industry, conducted by the Brazilian Institute of Geography and Statistics (IBGE).

Comparing July 2014 with the same month last year, however, the industrial production is down 3.5%. Declines were also detected in the year’s accumulated rate (-2.8%) and in the 12-month period (-1.2%).

The expansion from June to July was chiefly driven by the growth in durable consumer goods (20.3%),  and machinery and equipment in the productive sector (16.7%).

Twenty out of the 24 sectors surveyed reported higher output rates. The most significant positive figures were seen in IT equipment, electrical and optical devices (44.1%), and vehicles (8.5%).

On the other hand, the 6.3% reduction in food products prevented the country’s industry to present a better performance. Coke, oil products and biofuels (with -2.6%) is another sector to contribute negatively with the results.

Car Sales Down

Auto sales in Brazil were down 7.43% in August from July, according to a survey put out today (August 2) by the National Federation for the Distribution of Automotive Vehicles (Fenabrave).

Compared to August last year, a decline was observed – 16.05%. A reduction can also be seen when the accumulated rates (covering the year’s eight first months) for 2014 and 2013 are taken into account – -8.62%.

Altogether, 404,217 vehicles were sold in August, and 3,333 million in 2014. In the same period last year, figures reached 481,524 and 3,647 million respectively. In July this year, sales stood at 436,674 vehicles.

Auto sales have a significant share of the vehicle market – 48% of sales from January to August. Next come motorcycles, with 28.88% and light commercial vehicles (vans, for instance), with 16.22%.

In August, 193,146 cars were traded, 7.12 lower than July (207,963). Compared to August last year, when 241,681 cars were sold, the plunge reaches 20.08%.

Considering sales of cars and light commercial vehicles, this August is the worst in the last four years.

ABr

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