Brazil: Current account deficit more than doubles in August
Brazil’s current account balance came in at a deficit of USD 4.3 billion in August, over double the USD 1.7 billion shortfall recorded in the same month of 2018. The result was a larger shortfall then market analysts’ expectations of a USD 4.0 billion deficit.
The result reflected a jump in the primary income deficit to USD 4.7 billion (August 2018: USD 1.0 billion deficit), amid greater remittances sent abroad and outflows from investment a drop-in reinvestment in the country. Meanwhile, the trade surplus widened coming in at USD 3.2 billion in August, up from the USD 2.8 billion recorded in the same month last year. That said, the widening was on the back of plunging imports and exports also recorded a significant drop. Meanwhile, foreign direct investment fell slightly but still remained solid, coming in at USD 9.5 billion in August (August 2018: USD 9.7 billion).
Along with August’s release, the Central Bank revised historical balance of payments statistics and updated its methodology for calculating some cross-border flows. This led to a notable revision in the current account deficit in for 2017, 2018 and 2019. Accordingly, the 12-month trailing current account deficit came in at USD 33.9 billion in August, widening from July’s revised USD 31.3 billion (previously reported: USD 22.1 billion). The result is equal to approximately 1.7% of GDP.