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Brazilian surplus widens on back of oil rig sale

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Staff writer ▼ | December 30, 2015
Oil rig Brazil
Brazil   Average exports slid 1.4%

The sale of an oil rig from Brazil for $818 million drove up the trade surplus and export revenues in the fourth week of December.

The Ministry of Development, Industry and Foreign Trade reported that in the four business days from December 21 to 27, Brazil exported $3.623 billion worth of goods and imported $1.599 billion. The resulting surplus was $2.024 billion.

Ministry numbers show exports averaged $905.8 million in the fourth week of December, up 16.4% from the third week. Finished goods exports, including the oil rig, averaged $482 million per day, up 45.4% from $331.6 million in the third week.

Semi-finished goods exports were up 5.7% in the fourth week of December, driven by wood pulp, semi-finished gold and leathers and hides. Basic goods exports dropped 10.3% on the back of weaker iron ore, crude oil and maize sales. Imports dropped 27% to $399.8 million as a consequence of reduced purchases of fuels and lubricants, mechanical equipment and consumer electronics.

Month-to-date through the fourth week of December, Brazil exported $14.514 billion and imported $9.272 billion in goods, resulting in a $5.243 billion surplus.

Average exports in the period slid 1.4% from a year ago to $806.4 million. Finished goods exports climbed 16.5%, with semi-finished goods dropping 2.4% and basic goods losing 9.9%.

Year-to-date through last Sunday, Brazil grossed $188.866 billion from exports and imported the equivalent of $170.182 billion, running a $18.684 billion surplus. A year ago, it posted a $4.414 billion deficit.

Brazil’s public sector deficit – encompassing the federal, state and municipal governments and state-owned companies – reached BRL 19.567 billion ($4.989 billion) in November, the Central Bank reported.

The deficit had been BRL 11.5 billion ($2.93 billion) in October and BRL 8.1 billion ($2 billion) in November 2014. Last month’s result was the worst ever for a November since the Central Bank started keeping track of numbers in December 2001.

In the first 11 months of the year, the public sector deficit hit BRL 39.520 billion ($10.077 billion). A year ago, the deficit had been BRL 19.6 billion ($4.99 billion).

In the 12 months ended November, a public sector deficit of BRL 52.4 billion ($13.3 billion) was recorded – the number is tantamount to 0.89% of Gross Domestic Product (GDP), and also the highest deficit-to-GDP ratio ever.

The General Market Price Index (IGP-M) declined in December in comparison to November, going from 1.52% to 0.49%. The result also stood below December 2014, when the index had a swing of 0.62%, but in 2015 the IGP-M increased 10.54% against 3.69% in 2014.

The IGP-M is used as basis for adjustments of electric energy prices and rent contracts. The survey of the index is done by the Brazilian Institute of Economics of Fundação Getulio Vargas (Ibre/FGV).

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