Brazil: Current account logs a surplus for seventh month straight in October
November 25, 2020
Brazil’s current account balance logged a surplus for the seventh consecutive month in October, coming in at USD 1.5 billion. The surplus contrasted the USD 8.1 billion deficit recorded in October 2019, but was it was down from September 2020’s surplus of USD 2.3 billion.
October’s result was chiefly driven by a narrower primary income deficit and a smaller shortfall in the services account. Moreover, the goods trade surplus increased in the month. The merchandise trade surplus rose to USD 4.8 billion from USD 1.8 billion in October 2019 on a stronger decline in imports than of exports. Meanwhile, net foreign direct investment weakened significantly in October, totaling USD 1.6 billion (October 2019: USD 8.2 billion).
Accordingly, the 12-month sum of the current account balance narrowed to a USD 15.3 billion deficit, which equates to approximately 1.0% of GDP, down from the USD 24.9 billion deficit logged in the 12 months ending in September (1.6% of GDP).
Author: Hanna Andersson, Economist