Brazil Underreports Exports Following Data Glitch
December 05 2019 - 3:13PM
Dow Jones News
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 paulo.trevisani@wsj.com
(END) Dow Jones Newswires
December 05, 2019 14:58 ET (19:58 GMT)
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