Brazil: Current account registers another surplus in May
June 24, 2020
Brazil’s current account balance registered a surplus for the third consecutive month in May, swinging to a USD 1.3 billion surplus from a USD 1.4 billion deficit in the same month a year earlier. However, May’s result was down from April’s surplus of USD 3.3 billion (previously reported: USD 3.8 billion).
This month’s print was largely due to a smaller primary income deficit as well as a narrower deficit in the services account. Meanwhile, the trade surplus narrowed in May. The merchandise trade surplus fell to USD 4.2 billion from USD 5.0 billion in May 2019 on a sharper contraction in exports than of imports. Moreover, net foreign direct investment weakened markedly in May, totaling USD 2.6 billion (May 2019: USD 8.3 billion).
Accordingly, the 12-month sum of the current account balance narrowed to a USD 42.4 billion deficit, which equates to approximately 2.5% of GDP, down from the USD 45.2 billion shortfall registered in the 12 months ending in April (2.6% of GDP).
Author: Hanna Andersson, Economist