Brazil Is Celebrating: The Country Is Importing More

Brazil has imported the equivalent to US$ 49.457 billion from January to the fourth week of October. This value is already greater than the total imported in the whole of last year, US$ 48.285 billion.

It also represents a 26.9% increase over the same period in 2003, when foreign purchases totalled US$ 38.965 billion. When comparing the first ten months of 2002 with the January to October of 2003, imports were practically stable.


Far from being bad news, according to experts, this growth shows the expansion of economic activity in the country, as companies are importing more so as to produce more.


According to information supplied by the Institute for Studies in aid of Industrial Development (Iedi), of the total imported by Brazil between January and September, raw material and intermediary goods answer to 53.8% and capital goods to 19.3%.


“When the subject is imports, reactions are frequently negative, people soon think of superfluous goods. But that is not reality, the products being imported in large quantity in Brazil are necessary for agricultural production,” stated Joseph Tutundjian, a specialist in foreign trade and former president of Cotia Trading, one of the largest in the country.


“The increase in these purchases shows an expansion of the country economy,” he added.


Although Brazil needs to generate surpluses on its foreign trade balance, the increase of imports does not worry, as exports are rising at an accelerated speed.


Up to the fourth week of October, the country has exported the equivalent to US$ 76.933 billion, or 30.5% more than in the same period in 2003.


This volume is also greater than that registered in the whole of last year.


This is so true that the trade balance surplus has risen from US$ 19.956 billion between January and the fourth week of October 2003 to US$ 27.476 billion in the same period this year.


“This is positive as imports rise together with national production and exports. It is not good when imports rise without other areas rising, but when they follow other indices, that is a sign that the economy is moving,” stated Julio Sérgio Gomes de Almeida, executive director of the Iedi.


Foreign Accounts


Brazil must generate foreign trade surpluses as the money that enters the country must compensate that which leaves.


After discounting the payment of interest, over the country foreign debt, the transfer of profits and dividends of multinational companies, and transfers made by Brazilians to foreign countries, it is necessary to calculate what the Brazilians and what Brazilian companies abroad send to the country, profits with exports and foreign direct investment.


As direct investment has been dropping in recent years, Tutundjian calculates that the country needs trade surpluses between US$ 20 billion and US$ 25 billion so as to balance its accounts.


But this certainly does not mean that the country has to try to inhibit imports – once the federal government forecasts that the foreign trade balance should reach the end of the year at US$ 30 billion -, but to export more so as to maintain a certain equilibrium.


“The more a country exports, the more it imports,” stated Tutundjian.


Almeida recalled that foreign trade is a two-way highway and that the greater imports identified this year are also good as the growth in 2003 was small.


“And this started creating problems with the Brazilian trade partners, as the country exported a great volume, but did not import so much,” he said.


“Now relations with the main partners are more balanced,” he added.


But apart from industrial inputs and capital goods, another factor contributing to greater Brazilian purchases is the increase in the price of oil on the foreign market.


Tutundjian stated that 20% of the country demand is supplied by imports of the commodity.


Almeida stated that oil answered to US$ 2 billion of the total Brazilian import growth. However, he recalls that foreign purchases have risen by over US$ 10 billion.


Consumption


Consumer goods imports still represent little in the indices, around 11%.


Almeida believes, however, that this should change starting next year due to the greater buying power in the population, as a result of the expansion of economic activity.


“This is also important as it is necessary to provide alternatives to consumers,” he said.


Tutundjian, however, does not believe in an expressive increase of consumer good imports in the near future.


This is due to the fact that, despite having gained a little this year against the dollar, the Brazilian real is still weak, at around three reais to one dollar, a situation that, it is believed, should continue.


ANBA ”“ Brazil-Arab News Agency

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