Brazil: Current account deficit narrows in February

Brazil’s current account balance improved in February, registering a shortfall of USD 935 million, compared to the USD 1.9 billion deficit recorded in the same month of 2016. However, the improvement was smaller than market analysts’ expectations of a USD 400 million surplus.

The trade surplus rose to a four-month high of USD 4.9 billion in February, boosting the current account. Exports growth recorded a second consecutive double-digit expansion over the same month last year, although growth weakened from January’s pace. Imports slowed notably, growing only 5.9% annually. Meanwhile, foreign direct investment more than halved from January’s result and came in at USD 5.3 billion.

In February, the 12-month accumulative current account deficit narrowed slightly to USD 22.8 billion from USD 23.8 billion in January. February’s result marked a deficit of approximately 1.2% of GDP.

Analysts who participated in this month’s LatinFocus Consensus Forecast panel expect a current account deficit of 1.4% of GDP in 2017. For 2018, panelists expect the current account deficit to widen to 1.8% of GDP.