Brazil: Current account deficit widens in October
November 22, 2016
Brazil’s current account balance deteriorated in October, recording the largest shortfall in three months. The current account registered a shortfall of USD 3.3 billion, which was larger than September’s USD 503 million deficit but was still a significant improvement on October 2015’s USD 4.3 billion deficit. Market analysts had expected a slightly smaller USD 3.1 billion deficit.
The trade surplus shrank in October, from September’s USD 3.8 billion to USD 2.3 billion—a nine-month low. Steeper contractions were recorded in both exports and imports, which fell at double-digit rates compared to the same month of 2015. Meanwhile, foreign direct investment came in at USD 8.4 billion, up from September’s USD 5.3 billion.
The moving 12-month current account deficit continued to narrow and was USD 22.3 billion in October, which was a smaller shortfall than September’s USD 23.3 billion deficit. The improving current account balance has been a bright spot in Brazil’s economic data and it now rests at the lowest level seen since November 2009. October’s result is equivalent to approximately 1.3% of GDP.