In the first week of May, industrial production figures were disclosed, showing the Brazilian economy is still fragile, in addition to foreign sector accounts, which are the one bright spot at this current moment.
Brazilian industrial production shrank at the margin in March, but during the quarter it was in positive territory.
Following on from better-than-expected industrial activity in the first two months of the year, the decline of 1.8% of industrial production fell short of our expectations (-0.1%) and the market (-1.0%).
Despite the disappointment, industrial production closed the first quarter with an increase of 0.7% at the margin. In comparison with the same period of last year, manufacturing production was up 1.1%.
Breaking down the indicator into its component parts, the 1.8% decline in the main index was due to a drop of 8.5% in the production of durable consumer goods and a fall of 2.5% in the production of capital and intermediate goods.
Recent industrial performance supports the view the recovery in activity is fragile, causing economic resumption to be uneven and protracted.
Following the trend of adjustment in the foreign accounts, the trade balance for April had its best result since the data set began, supporting our forecast of $60 billion for the balance this year.
In April, the trade balance hit $ 6.67 billion – in line with market expectations. There was a 27.8% increase in average daily exports, the highlight an 80% increase in annual iron ore exports. At the same time, average daily imports increased by 13.3%, with uniform growth across sectors.
In the first four months of the year, the trade balance registered a surplus of $ 21.4 billion. During the same period of last year, the trade balance was in a surplus of $ 13.25 billion.
That was last week, but let’s not dwell on the past, make sure you click here to see what is happening in the second week of May.