Brazil: Current account records largest deficit since January 2015
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.