Brazil posted a trade deficit of US$1.745 billion in January, official data showed on Monday, the first shortfall for the month of January in five years and an indication that trade might continue to be a drag on overall economic growth.
Economy Ministry officials said last month they expected rising imports this year to lead to an even smaller annual trade surplus than last year’s, which itself was the smallest surplus since 2015.
But the US$1.745 billion deficit last month was fueled more by a sharp fall in exports, which were 20% down to US$ 14.43 billion from the same month last year, Economy Ministry figures showed.
With imports falling a more slender 1.3% to US$ 16.175 billion, the overall trade deficit was particularly large. The Economy Ministry will publish its official 2020 trade balance estimate in April. The central bank said in December that it expects the trade surplus to shrink further this year to US$ 32 billion. Last year, Brazil’s trade surplus was US$ 46.7 billion.
Official figures showed that in the third quarter of last year the only two segments of the economy acting as a drag on overall growth were government spending and net trade.
The real’s slide to record lows against the U.S. dollar in recent months has failed to boost Brazilian exports, which have been hit by slowing global trade, U.S.-China trade tensions and economic difficulties in neighboring Argentina.
Addressing congress on Monday, president Jair Bolsonaro said that his legislative priorities for the year are tax reform, central bank autonomy, job creation and enacting regulatory framework for public sanitation.
Brazil’s Congress returned from the Christmas recess with lawmakers eyeing local mayoral elections in October, which political analysts say will make it unlikely that substantial laws will be passed this year.