why is not bad news

In May, bilateral trade with Brazil returned to negative territory, adding US $ 127 million.

This result implied a significant change after five months of balance or a slight surplus.

It should be noted that the neighboring economy is under surveillance, after private banks and consultants, as well as Bolsonaro's own government, have cut growth estimates for this year.

For that, In a context of local crisis, what is happening with Brazil is the key to macrism – in the electoral field – and large local companies.

However, this does not necessarily mean bad news for Cambiemos: it turns out that this drop is mainly due to imports which have eased their contraction.

Indeed, after a first period of four months with a fall of more than 46%, the month of May has ended on a lighter drop, in the order of 17.6%.

For its part, Ecolatina said that this slowdown took place "after the stability of the exchange rate and some clarifications concerning the Argentine electoral poll that would have boosted the level of activity in May".

Brazil, in addition to exporting cars to Argentina, is also a supplier of inputs, raw materials and machinery. For the decline in imports to become a positive symptom, in a scenario marked by the fall in domestic consumption.

Of course, on the other hand, the bullish trend of the Brazilian real helped in May (exceeding 4 units per dollar), "facilitating this downward moderation of purchases in the neighboring country," said the consultant.

On the other hand, exports maintained double-digit growth, rising by about 12.7 percent, "thanks to a Brazilian economy that, despite the slowing prospects, still requires foreign goods," said Ecolatina.

At a disaggregated level, domestic shipments were the most successful for cargo ships and buses, auto parts, malt, wheat, sunflower oil and tires.

"With regard to the remaining months of 2019, it is expected that the favorable performance of exports will be mitigated by the less dynamism of the economy of our main partner", they said, in a context where growth prospects are already at 1.3% for this year. For the year, the growth rate of sales in this market is estimated at around 7%.

"In the case of imports, the local recession will continue to affect them, although greater stability in the exchange rate and less uncertainty could be a stimulus."they added.

In any case, these would be a shocking setback (about 25%) and bilateral trade would release a surplus of about 600 million US dollars, concluded the consulting firm.

Visit of Bolsonaro

Brazilian President Jair Bolsonaro will travel to Buenos Aires on Thursday to meet his counterpart, Mauricio Macri, and adopt bilateral cooperation measures.

This will be Bolsonaro's first visit to Argentina, Brazil's third largest trading partner, behind China and the United States, and a first for Mercosur since taking office on 1 January as Brazil's new president.after Macri's trip to Brasilia on January 14th.

The Brazilian president, who will arrive in Buenos Aires on Thursday, said that at the meeting he will hold with Macri, they will also "discuss other measures of bilateral cooperation". He travels with several of his ministers.

On May 17, Macri received in Olivos deputy Eduardo Bolsonaro, son of the president of Brazil, and they agreed to advance "in a program of bilateral strategic integration" between the two countries.

In this regard, agreements will be signed in the field of energy and a dialogue will also be initiated on a crucial issue: the reduction of the common external tariff of Mercosur, a controversial measure since it implies less protection for energy. local industry, as reported iProfesional in this note.

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