Brazil warns that Argentina's crisis will affect its own growth projection – Noticiasdel6.com

Folha do Sao Paulo has published that the difficulties encountered by the Argentine economy will have negative effects on the Brazilian production and will condition this year's revision of the IBP, according to a report of the IFI Commission (Independiente Fiscal Institution)

"Argentina is one of Brazil's major trading partners and, this year, it has been confronted with a turbulent economic scenario that l & # 39; 39, has asked for help from the IMF, "said the São Paulo newspaper. The most sensitive sectors in this scenario are the automobile. Argentina receives 76% of Brazilian light vehicle exports and 46% of trucks and buses, according to Anfavea, an entity that represents the automotive sector.

Sales to Argentina also involve, according to 2017 data, a significant business volume in the fields of machinery and boilers (10%) and steel (4.5%) .

For Celso Grisi, professor of foreign trade at the University of São Paulo, the decline in demand for cars in Argentina will affect the GDP. Growth projections have already been revised due to the mobilization of truckers. It's between 1% and 1.5%. The automotive industry accounts for about 22% of industrial GDP and 4% of the total.

According to Grisi, the crisis in this sector will not represent more than 3.5% of GDP this year. "The impact is not insignificant, even though it's not tragic," he says. More worrying, he says, is a possible repercussion in the production chain and in the jobs generated by the production of vehicles.

"We are big buyers of Argentine wheat, but the balance of trade is more favorable in Brazil, because of the manufactures and semi-finished products that we send there," says Otto Nogami, economics professor at Insper .

According to data published by Anfevea this Friday, the projections have already begun to materialize. Sales of light-duty vehicles, trucks and buses for transportation abroad amounted to 64,900 units in June, down 4.4% from the same month in the same month. 39, last year.

"This is a start to review Argentina's import applications and, therefore, our exports." We look with a little care. stronger pace, "says Antonio Megale, president of Anfavea.

Strong decline of the automotive industry in June

In the January to June cumulation, the advance was only 0.5% compared to the first half of last year.The result led the entity to revise its projection that exports would reach 800,000 units per year. to be about 766,000 units, a number that the president of Anfavea still considers satisfactory.

"For requests that come from Argentina and Mexico, our main markets, we believe that At the same level of 2017, which is not negligible because 766 thousand units constituted the historical record of the automotive industry. This is not bad, but unfortunately, a bit below our previous projections, "he adds.

In Brazil, they point out that Argentina has recorded a rise in the dollar this year , with the Macri government's difficulty in protecting its currency from devaluation, knocking on the door of the IMF and reducing the country's projected economic growth in half.

The revision of the estimate of exports also affects Brazilian production forecast.In the first half, the industry produced 1.43 million units in Brazil, a peak of 13.6% so far, but which must be cooled to second half, according to Megale.

The crisis in the neighboring country particularly affects the exports of vehicles made in Brazil.About Argentina received 76% of Brazilian cars sent abroad in 2017. Among the trucks , the total reaches 46% of production, according to Anfavea About 762,000 Brazilian cars crossed the border last year, accounting for 28% of all that has been produced in Brazil between light models, buses and trucks.

The recession begins to be felt: the use of installed capacity

"Certainly, the Argentine market will fall between 50,000 and 100,000 units this year, most of between them will be cars imported from Brazil.The sales will be maintained by vehicles produced there, "says Antonio Filosa, president of the group FCA (which brings together Fiat and Chrysler) in Latin America.

In total, the manufacturer Automotive has exported 121,000 cars in 2017. More than 70% have been sent to Argentina, which today produces only the Fiat Cronos sedan and parts of the Córdoba factory.

At Ford, the More concern concerns the range of products that range from Argentina to Brazil. According to Mauricio Greco, marketing director of the automobile company, the company continues to evaluate the current scenario and hopes that the import of the Focus line will not ask no problem and that she has become one of the oldest in the world. Volkswagen, which produces the Gol in Brazil, a model that is a leader in the Argentine market, declined to comment on export issues.

Source: The Online Policy.