Brazil trade deficit worst in 16 years

[BRASILIA] Brazil posted a US$1.18 billion October trade deficit on Monday, its second straight monthly deficit and worst October figure in 16 years as Latin America's biggest economy heads for almost zero growth this year.

Official government data showed the loss following on from a US$939 million September deficit as Trade Secretary Daniel Godinho blamed the figures largely on a 40 per cent fall in iron ore prices and sluggish auto sales, notably in Argentina.

Brazil's cumulative deficit for the year to date is US$1.87 billion, with exports down 3.7 per cent at US$191.97 billion and imports also down 3.7 per cent at US$193.84 billion.

Last year, the world's seventh largest economy posted an overall surplus of US$2.56 billion - the worst performance in 13 years.

Exports to struggling Argentina, Brazil's third largest export market after China and the United States, slumped by a quarter (26.8 per cent) January through October, largely on a falloff in auto sales.

Exports to China and the European Union meanwhile fell 6.8 per cent and 10.4 per cent respectively over that period but rose 8.3 per cent to the US market.

Imports from Argentina fell 5.9 per cent, EU imports by 6.2 per cent and US imports by 1.9 per cent - but Chinese imports rose 0.5 per cent.

Brazil has endured four years of sluggish growth after several years of high growth beforehand peaked in 2010 when GDP rose 7.5 per cent on high Chinese demand for commodities which has since fallen back.

Analysts forecast Brazilian growth for this year will come in at just 0.24 per cent.

AFP