Brazil Monthly Trade Surplus Highest Since 1989

Brazil’s trade surplus set a monthly record on August as commodity prices rose, contributing to a gradual economic recovery and a stable currency, official data showed late Friday.

Brazil posted a trade surplus of $5.599 billion in August, the biggest for the month since the current data series began in 1989, the trade ministry said. Exports totaled $19.475 billion and imports $13.876 billion, Reuters reported.

Brazil had a trade surplus of $48.109 billion between January and August, also a record. The surplus in the year to date exceeds the $47.7 billion surplus for all of 2016.

Exports rose across the board in August, from raw materials such as soybeans to manufactured goods such as automobiles. Higher prices of iron ore, oil, coffee and sugar contributed to the record surplus, ministry data showed.

Economists expect a record-high trade surplus of $61.35 billion this year, according to a weekly central bank survey released on Monday.

Brazil may be embroiled in a corruption scandal that has implicated the Brazilian federal government at the highest levels, but the political strife hasn’t carried over to the Brazilian economy. Brazil’s GDP outpaced expected growth in Q2 2017 as part of their recovery from the nation’s most significant economic downturn in a century, Sputnik reported.

The Brazilian Institute of Geography and Statistics said that falling inflation and interest rates were doing wonders for Brazil’s economic recovery. GDP grew 0.2% over the quarter, instead of the 0.1% that had been projected.

For the first time since 2014, household spending increased. This was due to a government measure allowing employees to draw money from their unemployment funds if they so chose, injecting $14 billion back into the economy between March and July.

Economists say that so long as consumer spending keeps climbing, Brazil’s economy will keep rebounding. “There’s been consistent improvement in factors driving consumption: Lower inflation and interest rates are boosting available household income,” said Rodolfo Margato, an economist with Spanish banking group the Santander Group, to the Daily Mail. “The pace of investments in 2018 will determine whether GDP will grow 1.5% or 3%,” he added.

Brazil is recovering from an economic crisis that saw their GDP drop 3.8% in 2015, and 3.6% on top of that in 2016. Some 2.8 million jobs were lost and unemployment hit 12% by the end of 2016.

Brazil is by far the largest economy in South America—its economy makes up 48% of the continent’s GDP even after two years of drastic recession.