Current Account in Brazil

Brazil Current Account | Economic News & Forecasts

Brazil - Current Account

Current account drops into deficit in July

Brazil’s current account recorded a deficit of USD 1.6 billion in July, below the USD 0.6 billion shortfall recorded in July 2020 and contrasting the USD 3.0 billion surplus clocked in June of this year.

July’s result largely reflected greater deficits in the services and primary income accounts compared to a year ago, while the goods surplus narrowed slightly. Meanwhile, net foreign investment strengthened in the month, totaling USD 6.1 billion (July 2020: USD 5.2 billion).

Accordingly, the 12-month sum of the current balance widened slightly to a USD 20.3 billion deficit from the USD 19.4 billion shortfall recorded in June, which was equivalent to approximately 1.3% of GDP (June: Approximately 1.3% of GDP).

Commenting on the outlook for Brazil’s current account, Alberto Ramos, economist at Goldman Sachs, noted:

“Overall, the short-term current account dynamics remain favorable given solid export demand and improving terms of trade compounded by the soft domestic demand and a weak/competitive real effective exchange rate, but a deep fiscal adjustment that would elevate public sector savings remains critical to facilitate a permanent structural current account adjustment (rather than just a cyclical adjustment driven by the weak below-potential domestic demand).”

The LatinFocus Consensus Forecast projects a current account deficit of 0.5% of GDP in 2021. For 2022, panelists foresee the current account deficit at 1.3% of GDP.

Brazil - Current Account Data

2015   2016   2017   2018   2019  
Current Account (% of GDP)-3.0  -1.3  -0.7  -2.2  -2.7  

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Brazil Current Account Chart

Brazil Current Account
Note: Current account balance as % of GDP.
Source: Central Bank of Brazil and FocusEconomics calculations.

Brazil Facts

Value Change Date
Bond Yield6.79-0.82 %Dec 31
Exchange Rate4.02-0.13 %Jan 01

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