Brazil posted a trade surplus of $7.1 billion in July, down 6.3% from a year earlier, as imports grew at a faster pace than exports, official data showed on Wednesday.

Exports rose 4.8% to $32.3 billion, while imports jumped 8.4% to $25.2 billion, driven by strong demand across a broad range of goods.

Year-to-date, the trade surplus shrank by a quarter to $37 billion when compared to the same period last year, as resilient domestic activity continued to support import growth.

The government expects Latin America’s largest economy to expand 2.5% this year despite an aggressive monetary tightening cycle that began last September to curb inflation and that has put the country’s benchmark interest rate at a near 20-year high of 15%.

July import growth was widespread, with double-digit increases across key categories including fertilizers, fuels, machinery and engines, auto parts, and pharmaceuticals.

Export value gains, typically driven by commodities, were supported by modest increases in soybean shipments and more robust growth in coffee, and beef exports.
Source: Reuters