Brazil’s trade surplus fell 19.8% in 2010 to 20.28 billion USD, the smallest in eight years. Exports grew 31.4% to 201.9 billion, a new record, but imports surged 41.6% to 181.64 billion, the Ministry of Development, Industry and Commerce said this week.
The volume of Brazil’s foreign trade was up 36.1% overall, a sign of economic recovery, according to the ministry.
But the decline of the trade surplus is a major concern of the administration of Brazilian President Dilma Rousseff, who took office January first, succeeding two-term head of state Lula da Silva.
The main cause for the deterioration of the trade surplus is the rise in the value of the Real as a result of other countries’ monetary policies, said Development, Industry and Commerce Minister Fernando Pimentel in his first official comments since being sworn-in.
“There is an evident exchange-rate war in the world, which has reflected in Brazil’s trade balance with a perverse effect on industry,” he said.
The phrase “currency war” was first introduced into the global economic debate several months ago by Lula da Silvs’s finance minister, Guido Mantega, who retained that post in the new Brazilian government.
The Real has risen by 108% against the US dollar since Lula da Silva became president in 2003 several Brazilian private analysts said in a study released last week and published by O Estado de Sao Paulo.