Follow us on:   

Brazil posts highest deficit amid stunted growth
February 3, 2013, 5:42 pm


Brazil’s economy will expand from 3 per cent to 4 per cent in 2013 according to the country’s finance minister. [Getty Images]

Exports of Brazilian goods fell slightly in 2012, but the rise in fuel imports resulted in the country’s largest trade deficit in more than 50 years, the Ministry of Development, Industry and Foreign Trade said in a report released yesterday.

The latest figures recorded a deficit of $4.04 billion in the period after posting a surplus of $2.25 billion in December.

Tatiana Prazeres, foreign trade secretary told reporters that the higher than expected deficit figures are a result of a change in accounting procedures initiated by the government. She said that  December’s fuel imports figures were not registered for that month last year.

She warned that higher than anticipated deficit figures for February and March were likely because fuel import figures that were not included last year will be added in the coming months.

“Everything should return to normal after March,” Prazeres told reporters.

But the discouraging figures are not likely to boost the economic policies of Brazilian President Dilma Rousseff, who in recent months turned to cutting electricity-taxes, extending payroll-tax cuts, and lowering taxes on cars and clothing in a bid to slash inflation and get the economy out of its virtual freeze.

Brazil’s economic growth, which stood at a healthy 7.5 per cent in 2010, has been battered due to the recession still beleaguering Europe and declining demand for Brazilian goods.

Economists slashed Brazil’s growth in 2012 from 1.5 to just 1 per cent.

However, positive figures such as its 5.5 per cent unemployment in 2012 are only set to improve as the labour market looks to hire again. In December, the unemployment rate was down to 4.6 per cent.

“Brazil’s economy will expand 3 per cent to 4 per cent this [2013] year,” Guido Mantega, Brazil’s finance minister said last week.

But a central bank survey of chief economists shows that they cut their forecasts for growth this year for the fourth consecutive week to 3.10 per cent.

Source: Agencies