Brazil’s trade data in October was abysmal. Exports fell 10.2% year-over-year to $13.721 billion and imports fell 15% year-over-year to $11.375 billion. Through the first 10 months of the year Brazil recorded a $38.5 billion trade surplus which is the highest trade surplus on record going back to the start of the series in 1989.
Thanks to our friends at Now-Casting.com we can see approximately how much this will affect 4Q16 and 1Q17 GDP. And boy does it affect it. The disappointing trade data lowered the year-over-year change in 4Q16 to -157 bps from -79 bps and it lowered the year-over-year change in 1Q17 from +17 bps to -101 bps. There was some hope that 1Q17 GDP would finally grow on a year-over-year basis for the first time since 1Q14. However, with these disappointing trade figures out we will have to see a significant surprise to the upside for most, if not all, economic data points for this to happen.