Brazil: Current account deficit widens in February
March 25, 2020
Brazil’s current account deficit totaled USD 3.9 billion in February, widening from the USD 3.3 billion shortfall recorded in the same month of 2019, but was significantly less than January’s USD 11.9 billion deficit.
February’s result reflected a greater shortfall in the services account and a wider primary income deficit. The primary income deficit rose as profits and dividends were sent abroad, causing capital flight out of the country. Meanwhile, net foreign direct investment moderated in the month, totaling USD 6.0 billion (February 2019: USD 7.7 bn). The merchandise trade surplus, however, was stable at USD 3.1 billion as a rebound in exports was offset by a stronger recovery in imports.
Accordingly, the 12-month sum of the current account balance widened to a USD 52.9 billion shortfall, which was equivalent to approximately 2.9% of GDP, from the USD 52.3 billion deficit registered in the 12 months ending in January.
Author: Lindsey Ice, Economist