Brazil Current Account February 2016


Brazil: Current account records smallest deficit since February 2013

March 24, 2016

In February, the current account balance registered a deficit of USD 1.9 billion, which was a notable improvement from the USD 7.2 billion deficit recorded in the same month last year. However, the result undershot market analysts’ expectations of a meagre USD 200 million shortfall. 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 3.0 billion in February, which was notably above January’s USD 900 million surplus and contrasted the USD 7.2 billion deficit tallied in February 2015. Although weak external demand is hurting Brazil’s exports, the low value of the real has caused import demand to drop and the trade balance.

The moving 12-month current account deficit recorded USD 46.3 billion in February, which was a smaller shortfall than January’s USD 51.5 billion deficit. February’s result is equivalent to approximately 2.7% of GDP.

Analysts who participated in this month’s LatinFocus Consensus Forecast panel expect a current account deficit of 1.9% of GDP in 2016. For 2017, panelists expect the current account deficit to be 1.5% of GDP.

Author: Angela Bouzanis, Senior Economist

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Brazil Current Account Chart

Brazil Current Account February 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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