Brazil: Current account deficit narrows in December
January 27, 2020
Brazil’s current account posted a USD 5.7 billion deficit in December, narrowing from the USD 6.1 billion shortfall registered in December 2018 but significantly wider than the USD 2.2 billion deficit in November.
The result was largely due to a smaller primary income deficit as well as a narrower merchandise trade surplus (December: USD 5.6 bn; December 2018: USD 6.4 bn). Exports posted a sizable contraction in December amid subdued demand from key trading partners, particularly Argentina, although imports also fell but at a softer pace. Conversely, foreign direct investment jumped at the end of the year, totaling USD 9.4 billion (December 2018: USD 8.3 bn). The shortfall in the services account widened in December compared to the same month last year.
Accordingly, the full-year current account deficit rose to USD 50.8 billion in 2019 from USD 41.5 billion deficit recorded in 2018, which was equivalent to approximately 2.8% of GDP.