Good morning! Today, Brazil’s record-setting trade surplus masks an important issue. The growing confidence of Brazilian industries. The end of an era for banks.
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Brazil’s export portfolio is getting even less complex
The Brazilian government celebrated the country’s record-shattering trade surplus numbers of 2023 as a sign of a buoyant economy. The surplus neared the USD 100 billion mark and exceeded 2022 levels by 60 percent â but beneath the surface, the numbers point to a long-term problem. Brazilian exports are becoming less sophisticated and less diverse. Exporters are also too reliant on a handful of markets.
State of play. China gobbles up a third of all Brazilian exports, a share that stood below 2 percent at the turn of the century. Meanwhile, soybeans, iron ore, and oil account for 37 percent of shipments. Eighteen years ago, these products had a 10 percent share in the export portfolio.
đ Why it matters. Over the last couple of decades, Brazil has moved away from diversifying and qualifying its exports.
- Extractive industries...