Brazil’s Trade Balance Now In Deficit

Brazil’s Balance of Trade has swung back into deficit according to the latest figures just released for the month of September. The reported figure is a deficit of BRL -0.94Bn compared to a surplus of BRL 1.17Bn recorded in the month of August, a negative figure was expected this month but only of around BRL -0.65Bn. Brazil has a good record of maintaining a positive Trade Balance and this is the first time since February that the number has come in negative. Foreign Exchange Flows were slightly up on the month, the latest report shows a positive BRL 3.56Bn worth compared to BRL 3.43Bn in August.

Earlier in the day the latest industrial update for Brazil was published, the Markit Economics / HSBC Purchasing Managers Index (PMI) for the Manufacturing sector has disappointed markets by slipping back into contractionary territory, this comes after last month saw the first expansionary reading in almost half a year. The latest index reads at 49.3, down from the previous month’s 50.2 level and coming in well below analysts estimates for a 49.9 recording this month.

With little sign of improvement in the Brazilian economy in the near term, analysts have once again reduced their forecasts for the country’s growth rate this year. A survey of 100 economists returned an average projection of 0.29% GDP expansion for the full year to the end of 2014, this represents a slight drop off from the same survey last month which projected 0.30% growth, the 2015 average forecast still stands at 1.01%. The same panel of economists have also raised their forecast for the Brazilian rate of inflation, this is now projected to be 6.31% by the end of the year, this is up from last month’s prediction of 6.30%. The respondents also maintained their year end forecast for the country’s key interest at 11.0%.