The trade truce between the United States and China, and the outbreak of Covid-19 disease in China may lead to Brazil losing 15% of exports that it currently sends to China, according to the Brazilian Economics Institute (Ibre) of the Getúlio Vargas Foundation.
The bulletin on the Foreign Trade Indicator (Icomex) published by Ibre showed that those two factors, alongside the effect of the economic situation of Argentina, “signal and reinforce the trend for the reduction of the balance of trade surplus in 2020.”
Ibre economist Lia Valls said that the estimated losses are still preliminary, because it is not clear know how long it will take to control the coronavirus epidemic, and the concrete effects of the epidemic on China’s economy have yet to be established.
The economist noted that the forecasts for economic growth in China this year range between 5% and 6%, due to the epidemic that began in the city of Wuhan, Hubei province.
“The epidemic, together with the trade truce between the United States and China, points to a decline in commodity prices in the coming months and a decline in imports from China,” said the bulletin.
The bulletin noted that the Brazilian balance of trade recorded a deficit of US$1.7 billion in January and that trade with China resulted in a deficit of US$1.57 billion.
Brazilian exports to China fell 8.8% in value, with drops of 2.5% in quantity and 6.4% in prices, and in the case of imports there was an increase of 3.4% in quantity, but a decrease of 3.8% in prices. (macauhub)