Brazil: Current account surplus grows in May
June 24, 2016
In May, the current account balance registered a surplus of USD 1.2 billion, which marked the best result since August 2008 and notably contrasted the USD 3.4 billion deficit recorded in May 2015. The result came in below market analysts’ expectations of a USD 1.9 billion surplus. In the midst of an onslaught of negative economic data concerning Latin America’s largest economy, the improving current account balance has been a bright spot.
The trade balance registered a surplus of USD 6.4 billion in May, which was above April’s USD 4.9 billion surplus and the USD 2.8 billion surplus tallied in May 2015. Although weak external demand is hurting Brazil’s exports, the low value of the real is supporting sales abroad and the abysmal economy has caused import demand to drop.
The moving 12-month current account deficit recorded USD 29.5 billion in May, which was a smaller shortfall than April’s USD 34.1 billion deficit. May’s result is equivalent to approximately 1.7% of GDP.
Author: Christopher Mc Innes, Economist