Brazil Underreports Exports Following Data Glitch

Date : 12/05/2019 @ 8:13PM
Source : Dow Jones News

Brazil Underreports Exports Following Data Glitch

By Paulo Trevisani 

BRASÍLIA -- A glitch in Brazil's handling of trade data led the government to underreport exports in recent months by about $7 billion, likely causing the real to weaken and forcing authorities to revise other economic indicators.

Officials at the country's data-processing service Serpro said technicians at the agency were responsible for not detecting the errors, which followed a major hardware and software upgrade last year.

At some point, the system began to randomly exclude part of the data that exporters input to a platform operated by Serpro.

"The problem had more than one cause, but the humans handling the system should have noticed," Serpro's chief executive, Caio Paes de Andrade, said in an interview. "Some of them actually broke down and cried when they saw what they had done," he added.

He said some employees would be fired.

The issue was disclosed last Thursday after the Economy Ministry noticed November's weekly export numbers were coming in about a third lower than usual, Mr. de Andrade said.

The mistake was corrected on time for Monday's release of November's $3.43 billion trade surplus. Brazil exported $13.5 billion in full the month, and not the $9.7 billion that Serpro data had been showing.

September exports were revised up by $1.37 billion to $20.3 billion, and October exports were raised by $1.35 billion to $19.6 billion, widening the surpluses for each of those months.

The trade numbers are closely monitored by economists and foreign-exchange traders.

"People certainly made wrong investments because of the wrong data," said Pablo Spyer, operating chief at Mirae Asset investment in São Paulo. "Many people would have invested differently if the data were different."

He said it was likely that the mistake and its correction had a small impact on the currency.

The Brazilian real on Thursday traded at 4.18 per dollar, after weakening to as much as 4.27 per dollar last week.

Capital Economics chief emerging-markets economist William Jackson had attributed recent weakness in the real in part to the trade numbers and their effect on Brazil's current account.

"The weakness of export growth helps to explain the widening of the current-account deficit, which is one factor behind the recent weakness of the real," he said in a report Tuesday.

The government and central bank will review trade, current account and this week's economic growth numbers as a result of the glitch.

Mr. de Andrade ruled out the possibility of sabotage. "That thought did cross my mind, but I saw how quickly the people responsible found the mistake and fixed it," he said.

He said the internal probe so far suggests that the software vendors didn't clearly explain all the adjustments that needed to be made, and that the agency's employees failed to notice something was wrong.

Many economists are giving Serpro the benefit of the doubt.

"I think it was just an honest mistake," said Solange Chachamovitz, chief economist at ARX Investimentos brokerage in Rio de Janeiro.

--Anthony Harrup contributed to this article.

Write to Paulo Trevisani at


(END) Dow Jones Newswires

December 05, 2019 14:58 ET (19:58 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.

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