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Brazil closes 2017 with record trade surplus

Wednesday, January 03, 2018

BRASÍLIA, Brazil (AFP) — Brazil's road to economic recovery has passed another milestone, with official data showing yesterday that the country finished 2017 with a record trade surplus 40.5 per cent higher than in the previous year.

The US$67-billion surplus was in line with market projections and within the US$65 -billion to US$70-billion range forecast by the Government.

Brazil's economy is projected to grow two per cent this year, according to an annual report by the United Nations-backed Economic Commission for Latin America and the Caribbean released last month.

That is unspectacular but solid — and far better than the 0.2 per cent expected for 2017, or the two years of its worst-ever recession preceding that.

The Government's own projections are slightly more optimistic: three per cent in 2018 and 1.1 per cent in 2017.

Economy Minister Henrique Meirelles said last month that the improvement was owed to better “fiscal control, the approval of a freeze on public spending, and reforms in general”.

The country's key interest rate is now at a record low of seven per cent — half of what it was in late 2016. Inflation is now considered a minimal risk.

Brazil's centre-right president, Michel Temer, has spearheaded austerity cuts, looser labour laws, and a big privatisation programme to boost the economy, Latin America's largest.

But Temer remains unpopular with voters, clouding the political outlook ahead of the presidential election this year.

The front-runners for the election so far are leftist former president Luiz Inacio Lula da Silva and right-wing former army officer Jair Bolsonaro. Neither man is much welcomed by investors.