untitled design

The country’s trade balance will remain in surplus even with the lockdown in China, says FGV

The confinement imposed by the Chinese government on the local population, to try to stop the outbreaks of Covid-19, should not have major impacts on Brazil’s foreign trade. However, restrictions can slow the pace of export growth.

This is what the new data from the Foreign Trade Indicator (Icomex), released by the Brazilian Institute of Economics of the Getúlio Vargas Foundation (FGV Ibre) this Wednesday (18) point out.

Despite the scenario, FGV draws attention to the effects generated by the isolation of Brazil’s largest trading partner.

“The lockdown adopted by China to contain the pandemic helps to intensify inflationary pressures in the world. At the same time, the reduction in China’s growth may reduce the growth of Brazilian exports, but not to the point of a drop in foreign sales to that country, in terms of value”, highlights the institution in a note from Icomex.

Faced with this scenario, the technical team that prepares the indicator assesses that the Brazilian trade balance will not suffer losses with the lockdown and should remain in surplus.

That is, the country will continue to register more exports than imports to the Asian giant, therefore, selling more than buying.

“The trade surplus with China reduced from US$ 13.4 billion to US$ 10.4 billion, while that of Brazil increased from US$ 18 billion to US$ 20.2 billion, in the comparison of the 1st quarter of 2021 and the of 2022”, highlights FGV.

“The balance with China explained 52% of the trade surplus. Even with the retraction of Chinese growth, the country should maintain its leadership position in Brazilian foreign trade”, explains the note.

In the one-year period, between April 2021 and 2022, in terms of values, exports grew 10.7% and imports rose 29%. This variation in imported items is justified by the high prices, which rose 35.4%.

In exported products, the increase was 21.1%. In terms of volumes traded, both exports and imports fell in the period.

The volume of exports to China fell by 9.6%.

However, in all other markets analyzed, Brazil recorded an increase.

For the United States, there was 7.7% growth and for the European Union, 10.2%. In South America, the increase was 6.7% in Argentina alone and 15.9% for the other neighbors.

In addition to the Chinese situation, the conflict between Ukraine and Russia in Eastern Europe has also impacted costs.

The prices of intermediate agricultural goods, that is, manufactured goods or raw materials, are an example of this.

These values ​​have been skyrocketing since last year. At the time, the supply of Russian fertilizers was not yet compromised. However, FGV Ibre warns that, with the war, the rise in prices tends to last for the next few months.

Source: CNN Brasil

You may also like

Get the latest

Stay Informed: Get the Latest Updates and Insights

 

Most popular