Brazil: Brazil posts record current account deficit in 2010
January 26, 2011
In the fourth quarter, the current account incurred a deficit of USD 12.0 billion. The result was broadly in line with the USD 12.2 billion deficit registered in the same period last year but exceeded the USD 11.4 billion deficit recorded in the third quarter of 2010. The full-year current account deficit widened markedly to USD 47.5 billion in 2010 (2.3% of GDP), nearly double the USD 24.3 billion deficit recorded in 2009 (1.5% GDP), marking a record deficit. The rapid deterioration in the external account reflects an increasing imbalance between domestic demand and GDP growth, which has been fuelled by the appreciation of the real. The resilience of imports is raising concerns among Brazilian policy makers, who have already implemented measures aimed at curbing the excessive appreciation of the currency.