UPDATE 1-Brazil posts $4.7 bln March trade surplus, but coronavirus impact yet to be felt

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By Marcela Ayres and Jamie McGeever

BRASILIA, April 1 (Reuters) – Brazil posted a trade surplus of $4.71 billion in March, official data showed on Wednesday, slightly wider than economists’ forecasts but a result which did not fully reflect the impact of the coronavirus fallout.

Brazil’s trade flows are expected to be hit much harder in the coming months, the economy ministry said, noting that weak growth and a record low exchange rate will weigh on import demand while collapsing commodity prices will affect exports.

Latin America’s largest economy posted a $4.71 billion trade surplus in March, the economy ministry said, on exports of $19.24 billion and imports totaling $14.53 billion.

That was slightly more than the median consensus forecast in a Reuters poll of economists for a $4 billion surplus.

The ministry said that total trade flows in the first quarter of the year were $94.1 billion, down 0.8% from the same period last year.

Exports declined 3.7% to $50.1 billion and the export price index fell 1.9%, while imports rose 2.6% to $44.0 billion and import price index fell 5.7%.

The ministry said it is delaying the announcement of its 2020 trade balance forecast for a month due to the coronavirus crisis, but said imports could be hit harder than exports.

“It is possible that the exports are less affected than imports, leading to an end-2020 trade balance that might be larger than average forecasts,” the ministry said.

The central bank last week revised up its 2020 trade surplus forecast to $33.5 billion from $32 billion three months ago, while the average forecast in the central bank’s latest weekly ‘FOCUS’ survey of economists is for a $35 billion surplus.

The value of commodity exports is likely to suffer from the steep fall in the price of those goods, which account for a huge slice of Brazilian exports, while the weak domestic economy and record low exchange rate will reduce imports, especially of capital goods. (Reporting by Marcela Ayres and Jamie McGeever Editing by Marguerita Choy)

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