The trade balance is a record of entries and exits in the country’s economy, through its exports and imports. While in exports the country sells goods abroad, in imports there is the consumption of goods that come from abroad.
The value of exports minus imports forms the balance of trade. If there are more exports, this result is positive and the country had a surplus in the period, and if it is negative, the country had a deficit.
Brazilian trade balance
Brazilian trade balance data are released every month by the Ministry of Economy’s Foreign Trade Secretariat.
Historically, Brazil exports more than it imports, almost always generating a favorable result for the trade balance.
Accumulated trade balance
|Balance of trade balance in 2020 (values in US $ billion FOB)|
|Month||Monthly exports||Accumulated exports||Monthly imports||Accumulated imports||Monthly balance||Accumulated balance|
In 2019, the Brazilian trade balance accumulated a positive balance (surplus) of US $ 48.036 billion.
The monthly and accumulated results for the trade balance in 2019 can be seen in the table below:
|Balance of trade balance in 2019 (values in US $ billion FOB)|
|Month||Monthly exports||Accumulated exports||Monthly imports||Accumulated Imports||Monthly balance||Accumulated balance|
In 2018, Brazil had a trade surplus of US $ 58.033 billion. This balance was the result of US $ 239.264 billion in exports and US $ 181.231 billion in imports of goods.
See the table with the balances of the last years:
|Brazilian trade balance (values in US $ billion)|
How the trade balance is calculated
The trade balance is a component of the balance of payments and refers to the exchange of goods between residents in the country and non-residents who are trading partners.
The balance of trade balance indicates the flow that occurred in the period considering the purchase and sale of goods with the rest of the world.
To calculate the amount that corresponds to the balance, you must do:
- Balance of Trade Balance = Exports – Imports
Of this balance, the trade balance can be classified as having a trade surplus or trade deficit when:
- Trade surplus: Exports> Imports
- Trade deficit: Imports> Exports
Having a trade surplus can be good for the country, since there is a greater demand for domestic products by foreign consumers. A very high surplus can contribute to the appreciation of the currency.
Otherwise, a trade deficit occurs when the quantity of foreign goods demanded is greater than sales to other countries, which can make the exchange rate more expensive.
From the division between exports by imports, the percentage for the coverage rate is calculated. This indicator shows how much of the exported value covers what has been imported.
For example, in the 2018 result, exports were US $ 239.3 billion, while imports of goods reached US $ 181.2 billion. This means that there was a trade surplus in the period:
|Exports||$ 239.264 billion|
|Imports||$ 181.231 billion|
|Balance of trade balance||$ 58.033 billion|
In this case, the value of exports covered imports by 132.02%, indicating a positive balance for the country.
If this figure is below 100%, exports are not sufficient for the country to cover what has been spent abroad.
Balance of payments trade balance
The export and import records do not summarize all the interaction that the country’s economy has with other countries, as there are other operations that involve exchanging money with the rest of the world.
All transactions between residents and non-residents are recorded in the balance of payments.
The trade balance is part of the country’s current transactions and shares space with service records, transfers of primary and secondary income.
In addition to current transactions, the balance of payments records the capital account and the financial account.