MercoPress. South Atlantic News Agency

Tepid isolated signs of recovery from Brazil

Brazil’s latest statistics revealed some encouraging numbers. The foreign trade surplus in March was 1.77 billion US dollars, the same as the February surplus and slightly higher than forecasted. Although expected, industrial production rose 1.8% in February over January boosted by a slight recovery in credit availability and the automotive sector.

Brazil faces a rough year in trade accounts due to the fall of international prices of commodities and slower demand for the country’s manufactured goods.

In March, Brazilian exports were 11.81 billion US dollars, down from 12.61 billion in March 2008. Imports were 10.04 billion, down from $11.63 billion in March a year ago.

Even in 2008 Brazil was anticipating a reduction in trade surplus, mainly because of rising imports on sustained domestic economic growth and a strong currency. Brazil's economy expanded 5.1% in 2008 and the US dollar plunged to 1.60 Real. However since last October the Real has been eroding and now stands in the range of 2.20 to US dollar and Brazilian growth this year could plunge to zero.

Brazil's trade surplus for the first quarter of 2009 was 3 billion USD, higher than the year-ago figure of 2.76 billion. However, according to the central bank's weekly survey of experts opinion released this week, the 2009 foreign trade surplus will reach just 14 billion USD down from 24.7 billion in 2008 and 40 billion in 2007.

Industrial production was supported by a robust increase in automotive sector production according to IBGE, the Statistics and Geography Institute. Auto output jumped 9.2% in February compared to January, according to the country's vehicle-makers association, Anfavea.

Helped by steep discounts and tax breaks auto sales soared in January and February after having fallen in November and December., aided by steep discounts and tax breaks. The sales have sharply reduced stocks.

However IBGE also pointed out that Brazil’s industrial production declined sharply in February, 17%, compared to the same month a year ago.