World Economy
0

Brazil Exiting Harsh Recession

Brazil Exiting Harsh Recession Brazil Exiting Harsh Recession

Brazil’s economy has clearly started to grow again after a harsh recession, Finance Minister Henrique Meirelles said late Tuesday at an aerospace and defense exposition in Rio de Janeiro.

Meirelles mentioned data on automobile sales as evidence of growth and said the economy likely expanded in the first quarter already.

He also said the current growth cycle will likely be sustained by an increase in investments, Reuters reported.

Brazil trade surplus in March reached $7.1 billion. It’s the highest surplus since 1989, when the government first began to compile the data. Brazilian exports added up to $20 billion–a 20.1% rise from February.

According to Brazil’s Ministry of Development, Industry, and Trade, the March results were 61% better than they were one year ago. “Exports have been pivotal for the Brazilian economy performance,” said Herlon Brandao, the ministry’s director of statistics and support to exports.

The most impressive thing about the record is that it happened despite Operation Weak Meat. On March 17, the federal police unveiled a corruption scheme within the ministry of agriculture.

Corrupt federal auditors received bribes in exchange for fraudulent sanitary permits.

Right after the scandal broke, meat exports dropped to practically zero, from $63 million to only $74,000 per day. But overall, meat exports rose by 4.4% in March in comparison to one year ago.

The daily average in March was of $57 million.

After the first two weeks following the scandal, countries started lifting barriers–including Hong Kong and China, the biggest importers.

Imports also rose. They amounted to $12.9 billion, a 7.1% rise from the previous month. That’s good news for Brazil’s economy. Over the past few years, there has been a decrease in demand due to the devaluation of the Brazilian real against the US dollar, as well as a rise in unemployment rates.

Meanwhile, industrial output in Brazil barely grew in February, government data showed on Tuesday, throwing cold water on hopes of a quicker recovery from a two-year recession.

Industrial production rose 0.1% in February from January, government statistics agency IBGE said, short of expectations for an increase of 0.7% in a Reuters poll of economists. Production fell 0.8% from a year earlier, compared to expectations of a 1.4% rise.

The disappointing performance of Brazilian manufacturers and miners in February added to a recent batch of frustrating data from retailers and service providers that had been expected to show Brazil’s economy finally emerging from its worst-ever recession.

 

 

Add new comment

Read our comment policy before posting your viewpoints

Financialtribune.com