Brazil Current Account March 2016


Brazil: Current account records smallest deficit since August 2010

April 20, 2016

In March, the current account balance registered a deficit of USD 855 million, which was a notable improvement from the USD 5.8 billion deficit recorded in the same month last year. The result was a notable improvement over market analysts’ expectations of a USD 1.2 billion shortfall and marked the smallest deficit since August 2010. The slimmer current account deficit has been a bright spot in recent economic data for Brazil as the country grapples with recession and high inflation levels.

The trade balance registered a surplus of USD 4.4 billion in March, which was above February’s USD 300 million surplus and the USD 455 million deficit tallied in March 2015. Although weak external demand is hurting Brazil’s exports, the low value of the real and abysmal economy has caused import demand to drop and the trade balance to improve notably.

The moving 12-month current account deficit recorded USD 41.4 billion in March, which was a smaller shortfall than February’s USD 46.3 billion deficit. March’s result is equivalent to approximately 2.4% of GDP.

Analysts who participated in this month’s LatinFocus Consensus Forecast panel expect a current account deficit of 1.4% of GDP in 2016. For 2017, panelists expect the current account deficit to be 1.1% of GDP.

Author: Angela Bouzanis, Senior Economist

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Brazil Current Account Chart

Brazil Current Account March 2016

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

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