Brasília – An increase in exports, reduced importation, and lower overseas spending by Brazilian citizens drove the country’s current account deficit to the lowest level for a July since 2009. The Brazilian Central Bank reported a USD 4.05 billion deficit during the month this Tuesday (23).
But last month’s deficit was up from USD 2.479 billion in June; April and May saw Brazil run current account surpluses.
In the 12 months through July, the country ran a USD 27.9 billion current account deficit tantamount to 1.57% of Gross Domestic Product (GDP). The debt-to-GDP ratio is the lowest since November 2009. The Central Bank is forecasting a USD 16 billion deficit by the end of 2016, with the estimate due for revision in September.
Foreign direct investment hit USD 33.894 billion year-to-date through July, down 8.2% from the comparable period in 2015, an amount that more than suffices to offset the deficit. The Central Bank’s year-end FDI projection is USD 70 billion, down from USD 75.1 billion last year.
*With information from ANBA. Translated by Gabriel Pomerancblum
