Record scale – 01/07/2024 – Opinion

There is good and bad news in the impressive trade balance of US$98.8 billion recorded by Brazil in 2023. The positive aspects certainly outweigh the negatives, but not by as large a margin as exports over imports.

Trade surpluses are not necessarily signs of economic strength. Successful countries have deficits on their balance sheets — and the most notorious example is the United States. The analysis of the indicator depends on its composition and circumstances.

In Brazil today, the result is welcome due to the significant inflow of foreign currency, which contributed to the fall in the dollar price and inflation, and the good performance of exports, especially primary products.

Even with a 6.3% drop in the prices of products sold, according to government data, the volume shipped increased by 8.7%. In nominal terms, exports and surplus broke records, but the country has already recorded higher figures as a proportion of Gross Domestic Product, that is, considering the size of the economy.

The agricultural and extractive sectors (oil and iron ore, mainly) accounted for the increase in shipments, with increases of 9% and 3.5%, respectively. Brazil, as we know, is competitive in these commodities, but annual numbers vary greatly according to global market fluctuations.

The manufacturing industry, which works with products with higher added value, suffered a drop of 2.3% and had its share of total exports reduced to 52.2%.

The most problematic thing about last year’s trade balance, however, is that the record was much more due to the drop in imports, of 11.7%, than to the increase in exports, of just 1.7%. Fewer purchases from abroad are usually signs of weakening domestic demand, whether from families or companies.

In the Brazilian case, there was an alarming drop in national investments, which fell from an already unsatisfactory 18.3% of GDP to 16.6% between the third quarters of 2022 and 2023 — experts point out that the country should aim for a rate of at least 25% for sustainable growth.

An important part of this item are acquisitions, by companies, of machinery and equipment intended to expand production capacity.

Countries must seek to expand foreign trade on all fronts, as a means of achieving economic efficiency and social well-being. The PT government will be right to leave aside its protectionist tendencies and not promote setbacks in Brazil’s precarious opening to the rest of the world.

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