Brasília – The weak economic activity is affecting the results of the Brazilian external accounts. The deficit of the current accounts – purchases and sales of goods and services between Brazil and the world – stood at US$ 2.547 billion in June and at US$ 38.282 billion in H1, according to data released this Wednesday (22th) by the Central Bank (BC). The results of last month were below the US$ 3.5 billion forecasted by the BC.
In comparison to H1 of last year, the deficit dropped 23.4%. In June alone, there was a decline of more than 50% over the same month of 2014. For the year, the BC hopes for the deficit of current accounts to stay at US$ 81 billion, against the amount of US$ 104.740 registered in 2014.
One of the items of external accounts that exhibit this impact is international travelling. With the weak economic activity and the dollar appreciated, there’s less money for Brazilian to travel. In June, for instance, there was a decline of 17.43% in this type of expenses (US$ 1.649 billion) over the same period of 2014. In H1, these expenses totaled US$ 9.940 billion, a drop of 20% over the same period of last year.
Besides the decline in the services account (international travelling, transportation, equipment rental, insurance, among others) and in the primary income (profit and dividends, interest rate payments and salaries), there was a surplus in the trade balance (larger amount of exports than imports).
According to the deputy head of BC’s Economic Department, Fernando Rocha, June’s “main surprise” was the higher commercial surplus, which reached US$ 4.398 billion, the highest result since June 2009.
Rocha pointed out that the current account deficit in June was integrally funded by foreign direct investment in the country (FDI). When there’s a deficit in the current account, there’s a need to fund this result with foreign investments or borrow money from abroad. The foreign direct investments are considered the best way of funding because they are long-term.
In June, FDI reached US$ 5.397 billion, with US$ 30.918 billion in H1. “In June, it more than fully funded the current account deficit. In H1, it funded 81%, becoming the main source of funding of current accounts”, said Rocha.
The executive said also that the inflow of investments in the country remains stable and is aligned with the BC’s forecast of US$ 15 billion for the year. Investment in stocks traded in Brazil and abroad reached US$ 791 million last month and US$ 10.810 billion in H1 2015. “The more depreciated foreign exchange rate, for the investor, who has revenues in foreign currencies, makes the stocks cheaper”, assessed Rocha.
*Translated by Sérgio Kakitani with information from the ANBA Newsroom
