Economist points to massive surplus in Brazilian agriculture and says the country is becoming a world power in the sector.
An economist from the IIF pointed out that the real is undervalued.
247 - Robin Brooks, chief economist at the Institute of International Finance (IIF), pointed out on Twitter that Brazil is transforming into a global agricultural powerhouse, noting the trend of steady growth in the sector's surplus.
According to Brooks, given the prospects for growth in the surplus, the real is still undervalued. "Brazil is transforming itself into the world's agricultural powerhouse. Brazil's trade surplus has been growing. The reason for this is a structural shift towards very large and growing trade surpluses in agriculture. There is also an oil surplus, but it is smaller. The Brazilian real is undervalued!", wrote the economist.
In the two-year period 2020-21, the Gross Domestic Product (GDP) of Brazilian agribusiness reached record levels, and in 2020 its growth hit 24% compared to the gains of 2019, representing 26,6% of the entire Brazilian GDP. In 2021, this share reached 27,4%.
The agribusiness trade balance started 2023 with a surplus of US$ 8,69 billion, well above the US$ 2,61 billion surplus of the total trade balance (which considers products from all sectors).