Brazil posts smallest trade surplus in a decade

Brazil last year posted its smallest trade surplus in a decade as exports fell more than five percent, the Ministry of Industry and Trade said Wednesday. The surplus totaled $19.4 billion, plummeting 34.8 percent from 2011 in the latest sign of cooling in Latin America's largest economy. The smaller trade surplus stems directly from a weak global economy, said Tatiana Prazeres, the ministry's secretary for foreign trade. Exports totaled $242.5 billion, a drop of 5.3 percent, while imports declined 1.4 percent to $223.1 billion, the ministry said. Exports to China -- Brazil's top trade partner -- fell seven percent. Brazil's economy had been sizzling for six years through 2010, with average growth of 4.5 percent. But now the torrid expansion is over, for reasons including high labor costs and a drop in investment. Last month Brazil's Central Bank cut its GDP growth forecast for 2012 from 1.6 percent to one percent. It was the third downward revision by the Bank last year: from 3.5 percent to 2.5 percent in June, then down to 1.6 percent in September and to one percent in December. A study commissioned by the National Confederation of Industry last month found that Brazil ranked near the bottom among 14 emerging powers in terms of competitiveness, due to high capital and labor costs as well as to inadequate infrastructure.