Brazil Property Boom to Continue as Exports Soar

The Brazilian government has just boosted its 2011 export forecast after figures for April showed the trade surplus to be the highest this year. It increased to $1.86 billion in April up from $1.55 billion in March and $1.3 billion in April 2010. It’s expected that Brazil will export $245 billion worth of goods this year, a big increase on the previously predicted $229 billion, due in no small part to the current commodity boom.

Rising exports is of course a massive element in the Brazilian economic boom, which is directly related to the property boom in Brazil. As the economy expands so does the affluence of the population, and with that, as well as government support and increased access to mortgages, demand for property in Brazil to buy and rent is understandably soaring.

Brazilian trade Minister, Fernando Pimentel has said this is a conservative target, which will no doubt be beaten if the country can solve its problems over how to export more industrialised goods.

Brazil also has the problem of rising inflation and the Brazilian Real has gained 38% against the dollar in the last two years. The latter obviously affects the ability of manufacturers to compete in overseas markets.

Brazilian exports increased 33% in April to $20.2 billion while imports also increased 32% to $18.3 billion. While these figures are extremely good the chief economist at Gradual Investmentos, Andre Perfeito feels that commodities will fall as inflation curbing measures take effect by June, not just in Brazil but in other emerging markets such as China.

The sales of commodities and raw materials represented 51% of Brazilian foreign sales in April, up from 46.3% in April 2010. However, Brazilian exports of manufactured goods fell to 46% in April from 52% in April 2010. The Brazilian central bank now expects to have a trade surplus of $15 billion this year, up from its earlier forecast of $11 billion.

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