Brazil Current Account October 2019


Brazil: Current account deficit balloons in October

November 25, 2019

Brazil’s current account balance came in at a deficit of USD 7.9 billion in October, jumping from the USD 2.0 billion shortfall recorded in the same month of 2018. The result reflected recent revisions to balance of payments statistics and an update to the BCB’s methodology, which has led to notable downward revisions in the current account and revealed a bleaker external position for the country.

Behind October’s result was a sharp deterioration in the trade balance, which came in at USD 1.2 billion in the month (October 2018: 5.8 billion). Exports posted another sizable contraction in the month amid subdued demand from key trading partners, while imports grew solidly. Meanwhile, foreign direct investment fell, coming in at USD 6.8 billion in October (October 2018: USD 8.4 billion).

Accordingly, the 12-month trailing current account deficit also deteriorated and is now reveals a bleaker picture after the data revisions. The 12-month trailing current account deficit came in at USD 58.8 billion (September: USD 48.9 billion), the worst result seen since November 2015. The result is equal to approximately 3.0% of GDP.

The latest LatinFocus Consensus Forecast projects a current account deficit of 2.5% of GDP in 2020. For 2021, panelists expect the current account deficit is seen stable at 2.5% of GDP.

Author: Angela Bouzanis, Lead Economist

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Brazil Current Account Chart

Brazil Current Account October 2019

Note: Monthly and 12-month current account balance in USD billion.
Source: Central Bank of Brazil (BCB) and FocusEconomics calculations.

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