Brazil sees narrower trade surplus in 2024 after last year’s record

SAO PAULO (Reuters) -The Brazilian government expects to reach a 4.5% lower trade surplus this year from 2023, totaling some $94.4 billion and likely backed by imports growth, a new government estimate showed on Friday.

Last year, the South American country’s trade surplus – when the value of exports exceeds the value of imports – totaled nearly $99 billion, according to official data.

Expected 2024 imports are seen increasing by 5.4%, with export growth for the year seen up by 2.5%.

Analysts had previously said that the 2023 record would be tough to repeat, given that falling interest rates are expected to boost imports.

Last year’s record trade surplus represents nearly 61% growth over the previous record, which was recorded in 2022.

The annual trade surplus data for 2023 followed a monthly surplus of $9.4 billion in December, which landed above analyst expectations of $7.8 billion in a Reuters survey.

Imports in 2023 fell about 12% from 2022, according to figures from the Ministry of Development, Industry, Trade, and Services.

This trend persisted throughout the year, with contraction observed in both prices and volumes, resulting in lower imports of key products such as fuels, fertilizers and electronic components used by industry.

Meanwhile, Brazilian exports rose 1.7% in 2023.

Brazilian exports experienced an upswing late year due to an unprecedented agricultural harvest and a surge of shipments from the extractive sector.

The 2023 data also marked the first time Brazil exported more than $100 billion to a single country, China, in one year, said Tatiana Prazeres, foreign trade secretary. Exports to the Asian giant reached almost $106 billion last year.

(Reporting by Fabricio de Castro; Writing by Peter Frontini; Editing by Brendan O’Boyle and Jonathan Oatis)