Political Risk Latin America Blog @PolRiskLatam

Brazil’s misleading trade surplus

Posted in News and Articles, Political Risk by politicalrisklatam on May 3, 2011

by Samantha Pearson for Financial Times – Beyond Brics, May 3rd, 2011.

Take a look at Brazil’s trade balance and you might be surprised.

This is the country with one of the world’s most overvalued currencies, a currency which is now so strong that it is supposedly crippling exporters and flooding the country with cheap imports.

However, Brazil’s trade surplus actually widened for the third consecutive month in April and reached a record for the year, data showed on Monday.

Last month’s surplus hit $1.86bn, up from $1.55bn in March and $1.28bn a year earlier. It was almost a billion dollars higher than the median Bloomberg forecast.

The main reason for this, though, is the rapid rise in the price of commodities, the vast majority of those exports. (continue reading…. )

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