Brazil: Current account gap swells in July
August 23, 2013
The current account deficit stood at USD 9.0 billion in July. The figure more than doubled the USD 4.0 billion shortfall registered in the same month last year and was larger than the USD 8.4 billion deficit the market had expected.
The trade balance reached a monthly deficit of USD 1.9 billion, which contrasted to the 2.9 billion surplus registered in the same month last year. The services and income deficit was USD 7.4 billion in July, exceeding the USD 6.5 billion deficit posted in July 2012.
The moving 12-month current account deficit increased from USD 72.4 billion in May to USD 77.7 billion in June. Consequently, the current account deficit now represents 3.4% of GDP, a deterioration compared to the 3.2% deficit in June.
LatinFocus Consensus Forecast participants expect a current account deficit of 3.3% of GDP this year, which is down 0.2 percentage points from last month's forecast. For 2014, panelists expect the current account deficit to remain stable at 3.2% of GDP.
Author: Carl Kelly, Economist