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Brazilian surplus widens on back of oil rig sale

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