Brazil Current Account


Brazil: Brazil's current account deficit widens in the first quarter

May 25, 2011

In the first quarter, the current account balance incurred a deficit of USD 14.6 billion. The deficit was greater than the USD 11.9 billion deficit registered in the same period last year and exceeded the USD 12.0 billion deficit recorded in the fourth quarter of 2010. Although the trade balance remained in the black in the first quarter of 2011 totalling USD 3.2 billion, positive net exports were not enough to offset a negative balance in services (USD 7.8 billion) as well as income (USD 10.9 billion). Moreover, high interest rates and a resilient pace of economic expansion attract increasing amounts of foreign investment into the country and, consequently, drive up the demand for the real, which contributes to a widening of the gap between domestic investment and saving in the economy.


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