Brazil Current Account July 2019


Brazil: Current account records largest deficit since January 2015

August 26, 2019

Brazil’s current account balance came in at a deficit of USD 9.0 billion in July, over double the USD 4.4 billion shortfall recorded in the same month of 2018 and marking the largest deficit in over 4 years.

The result reflected a deterioration in the trade surplus which fell to USD 1.6 billion in July (July 2018: USD 3.5 billion) and a widening of the primary income deficit to USD 7.9 billion (July 2018: USD 5.1 billion). The primary income deficit soared as profits and dividends were sent abroad, causing capital flight out of the country. Meanwhile, foreign direct investment remained solid and came in at USD 7.7 billion in July (July 2018: USD 4.6 billion).

Accordingly, the 12-month trailing current account deficit widened from USD 17.1 billion in June to USD 22.1 billion in July. The result is equal to approximately 1.3% of GDP.

Analysts who participated in this month’s LatinFocus Consensus Forecast expect a current account deficit of 1.0% of GDP in 2019. For 2020, panelists expect the current account deficit to widen to 1.4% of GDP.

Author: Angela Bouzanis, Lead Economist

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Brazil Current Account Chart

Brazil Current Account July 2019

Note: Monthly and 12-month current account balance in USD billion.
Source: Central Bank of Brazil (BCB) and FocusEconomics calculations.

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