Happy Monday! This week, Brazil is becoming increasingly dependent on commodities and manufactured goods are losing out. Sergio Moro under the microscope for his private-sector earnings. Rate of Brazilians in debt keeps rising.
Brazilian manufactured goods losing space abroad
Brazil recorded a record-setting USD 61 billion trade surplus last year, 21-percent higher than the previous year. The government celebrated the figures as a statement of the country’s economic recovery, but a deeper look into the numbers throws up some eye-opening findings — especially for industrial producers.
- According to the Institute for Industrial Development Studies (Iedi), transformation industries recorded a trade deficit of USD 53.3 billion, the worst since 2015 — when Brazil was entering what was then its worst recession on record.
Why it matters. The numbers highlight a trend we pointed out last year: Brazil is becoming increasingly reliant on commodities. Exports from the country are becoming less sophisticated and diverse, and Brazil lacks integration into global production chains.
- Brazilian commodity producers have little control over the prices of their products, making them — and by extension the entire economy — highly exposed to external shocks.
Timing. Moreover, now is a bad time to depend on products such as iron ore, soy,...