Brazil's balance of trade began 2014 with disappointing results, after closing January with a deficit of 4.06 billion dollars, according to the figures released by the Ministry of Industry, Development and Foreign Trade. Exports totaled 16.02bn dollars, while imports reached 20.08bn.
January confirms the poor tendency of last year which ended with a trade surplus of 2.561bn dollars, the lowest in more than a decade and a fall of almost 87% compared to the 19.44bn surplus of 2012.
The government attributed the erosion of the trade surplus to maintenance works on petroleum platforms, that have reduced Brazilian crude oil production and forced the country to increase fuel imports in order to meet domestic demand. Likewise the lack of sufficient refining capacity has forced Petrobras to massive imports.
However the central bank is confident that Brazil's foreign trade will recover this year, with a surplus of 10bn dollars. But market analysts are not so sure since global economic growth is sluggish, commodities prices are declining while record low unemployment boosts demand for consumer goods.
Imports of consumer goods rose 8.8% in January from a year earlier, and imports of capital equipment rose 7.1%, the two biggest increases in the first month of the year.
In related news Brazil's manufacturing activity expanded slightly for the second straight month in January as new orders increased at the fastest pace in almost a year, the HSBC Purchasing Managers' Index showed.
According to the index Brazilian manufacturing sector rose to a seasonally adjusted 50.8 in January from 50.5 in December. The 50 mark separates contraction from expansion. New orders jumped to 52.4 from 50.7 in the previous month, marking the fastest rate of expansion since February 2013 as businesses reported strengthening demand.
Output expanded for the fifth straight month, the survey showed, though at the slowest pace since September. Consumer goods posted an improvement in new orders, output, employment and export business. In the capital goods segment, however, business conditions continued to decline.