Brazil Current Account January 2016

Brazil

Brazil: Current account deficit narrows in January

February 23, 2016

In January, the current account balance registered a deficit of USD 4.8 billion, which was a notable improvement from the USD 12.2 billion deficit recorded in the same month last year. In addition, the result was better than market analysts’ expectations of a USD 5.9 billion shortfall. The slimmer current account deficit has been a bright spot in recent economic data for Brazil as the country grapples with recession and high inflation levels.

The trade balance registered a surplus of USD 0.9 billion in January, which was notably below December’s USD 6.2 billion surplus but contrasted the USD 3.2 billion deficit tallied in January 2015. Although weak external demand is hurting Brazil’s exports, the low value of the real has caused import demand to drop and the trade balance to improve relative to last year.

The moving 12-month current account deficit recorded USD 51.6 billion in January, which was a smaller shortfall than December’s USD 58.9 billion deficit. January’s result is equivalent to approximately 2.9% of GDP.

Analysts who participated in this month’s LatinFocus Consensus Forecast panel expect a current account deficit of 2.3% of GDP in 2016. For 2017, panelists expect the current account deficit to be 2.0% of GDP.


Author: Angela Bouzanis, Senior Economist

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Brazil Current Account Chart


Brazil Current Account January 2016

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


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