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.