Brasília – The reduction of expenses with imports whose prices have declined in recent months has led Brazil's Ministry of Development, Industry, Trade and Services to forecast a record trade surplus in 2023. The first estimate of the year forecasts a surplus of USD 84 billion .

The forecast will be updated every three months. If confirmed, the surplus will be 36.8% higher than the positive result of USD 62 billion in 2022, the highest ever so far.

The trade balance is expected to climb as imports will decline more than exports. The government forecasts exports to reach USD 325 billion in 2023, down 2.8% from USD 334 billion last year. On the other hand, imports are expected to reach USD 241 billion, down 11.8% from USD 273 billion in 2022.

The reasons

The director of Foreign Trade Intelligence and Statistics, Herlon Brandão, said there're two reasons for the record-high result. On one hand, the price of energy commodities like oil and items like fertilizers are on a downtrend after peaking in the beginning of the Russia-Ukraine war. On the other hand, the economic slowdown can cause a sharp decline in imports as consumption shrinks.

The war between Russia and Ukraine has impacted imports in recent months. Global prices of fertilizers dropped by 24.4% in March compared to a year earlier. The average price of imported fuels declined 6.2% year on year. The average price of wheat, another product Brazil imports in large numbers, was up 12.2% but slowed down last year, with twelvemonth changes peaking at 60% at some points.

Translated by Guilherme Miranda

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