Brazil’s 2005 Trade Surplus Well Above Expectations: US$ 44 Bi

Brazil’s Minister of Development, Industry and Foreign Trade, Luis Fernando Furlan, told journalists at a press conference breakfast that Brazil’s year-end trade surplus will probably reach US$ 44 billion.

And then he surprised his listeners by saying that a much smaller surplus would be sufficient – under normal circumstances, with interest rates on a downward trajectory.

"We could be very comfortable with a trade surplus of around US$ 20 billion," he said.

It is Furlan’s understanding that the "cooling off" of the Brazilian economy this year, caused by the country’s high interest rates, put a brake on imports, which caused the unexpectedly large foreign trade surplus.

He pointed out that imports are a function of domestic economic dynamics: when there is domestic growth, imports will rise because they are mainly the machinery, equipment, components and raw material needed to feed output.

According to the ministry, up to December 7, Brazil’s cumulative trade surplus for the year was US$ 41.183 billion, with exports of slightly more than US$ 110 billion, which should reach US$ 117 billion by the end of the month.

The government’s present export target for 2006 is US$ 120 billion, with a surplus of US$ 30 billion.

Since Luiz Inácio Lula da Silva took office in January 2003, Brazil has a cumulative foreign trade surplus of over US$ 100 billion.

Agência Brasil

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