In the first half of 2024, the Brazilian economy's balance of trade in goods totaled US$41.9 billion, a 6.1% decrease compared to the same period of 2023, due to an increase in imports almost three times more intense than the rise in exports. 

The increase in our purchases of foreign goods reached 3.9% in the 1st half'24 in relation to the 1st half'23, while our exports grew 1.2%. The difference between inward and outward trade flows intensified in Q2'24, resulting in a reduction of almost 20% in the country's trade surplus.

Considering the time lag between export and import decisions versus actual shipments (6 months on average), it is possible to identify external and internal factors that contributed to these results.

On the external side, favorable and unfavorable facts related to external demand interacted, without, however, leveraging our sales. On the one hand, the global economy’s growth has been more resilient than expected, as discussed in Letter IEDI n. 1266 , supported by the dynamism of the two main destinations for our exports: the USA and China.

On the other hand, the volume of world trade in goods, which practically stagnated in 2023, has been improving in 2024, but should not exceed the pace of global GDP growth. In addition, it remains subject to geopolitical tensions and protectionist measures. The CPB World Trade Monitor indicates an expansion of only 0.9% of world trade in the 1st half'24.

As for the evolution of commodity prices, important for the value of Brazilian exports given the composition of the basket of goods we sell, there was an interruption of the sharp decline recorded in 2023 due to energy commodities, but in the 1st half'24 the trajectory was also not favorable. In this period, the prices of agricultural commodities were stable and those of metallic commodities fell by 3%.

On the domestic side, the phase of reduction in the base interest rate (Selic) from Aug'23 to May'24, together with the acceleration of employment and real household income and government programs, boosted domestic demand, as shown by GDP data (IEDI Analysis of Sep 03, 2024), and stimulated the country's imports.

The 3.9% increase in imports is explained by the 13.3% rise in the quantity of goods, more than offsetting the decline in prices of our foreign purchases. Above this aggregate figure was the expansion in our purchases of manufacturing goods: 4.2% due to a strong quantum expansion (12.6%). 

It should also be noted that in Q2'24, when GDP expansion surprised positively based on the pair investment-industry, there was an acceleration in the growth rate of imported manufacturing goods, from +10.6% in Q1'24 to +14.5%.

This double-digit positive rate in the volume of imported industrial goods contrasts with the evolution of domestic production in the sector, which, although expanding in the first half of 2024, had a much more modest strength: +2.7% in the year through Jun'24 compared to the same period of the previous year.

Despite this, the products whose foreign purchases expanded the most in Jan–Jun'24 were those from the agricultural sector, with an increase of 26.3% against Jan–Jun'23, despite the 19.5% drop in their quantum, which denotes a very positive price evolution of our imports. In the case of the extractive industry, there was a decrease in the quantity (-9.3%) and value (-3.6%) imported.

Regarding exports, the poor performance of the first half of 2024 (+1.2%) was mainly due to the fall in prices of commodities and commodity-derived products, since the exported quantum advanced 5.7%, repeating the pattern observed in 2023, as analyzed in Letter IEDI n. 1257. 

However, it is worth emphasizing the change in the composition of these external sales between 2023 and 2024. The extractive sector took the lead, with an increase of 21% in the value of exports, backed by a rise of 18.6% in the quantum exported. Such evolution still reflects the acceleration of Chinese growth in the second half of 2023. 

Although China's demand also contributed to the 8.8% high in the quantum exported by agriculture, it was not enough to cancel out the price drop, which generated a 8.3% decrease in the value of its foreign sales, the highest among the three sectors.

Shipments from manufacturing, in turn, were in an intermediate position, with a small decrease of 1.6% in the value exported, also reflecting the fall in prices, but much less intense than agricultural products'. This was so because the quantum exported was stagnant compared to the same period in 2023, in a context of modest dynamism of world trade and low competitiveness of national output. As a result, its share in the total decreased from 52.1% in the 1st half'23 to 50.6% in the same period of 2024.

Of a total of 23 manufacturing branches, 10 recorded increases in their foreign sales in relation to the previous year — against 12 branches in 2023. In addition to the reduction in the number of branches with positive performance, the concentration of the sector's sales in only 7 of them advanced further, going from 82.9% to 83.2% between the first half of 2023 and 2024.

Versão em português deste texto.