Brasília – The deficit in Brazil’s foreign accounts climbed to its highest level in October. According to figures disclosed by the Central Bank (BC) on Thursday (22), the deficit in current account transactions was US$ 5.431 billion in October and US$ 39.554 billion in the first months of the year.
Totalling the trade, service, income and unilateral transfer balances, current account transactions measure the country’s dependence on international capital and on foreign direct investment.
When the account results in a deficit, the country depends on foreign investment in the financial market and on investment of foreign countries in Brazil to finance itself. Foreign direct investment totalled US$ 7.7 billion in October, enough to cover the negative balance.
According to the joint head of the Economic Department of the Central Bank, Fernando Rocha, the growth of imports, expenses of Brazilian tourists abroad and of the transfer abroad of profits by subsidiaries of foreign companies was responsible for the record deficit in foreign currency accounts.
Despite the expressive result recorded last month, the BC technician said that the deficit in foreign accounts is stabilized. “Last year, we had a deficit of US$ 52.5 billion [in current account transactions]. For this year, we forecast US$ 53 billion.”
*With information from the ANBA Newsroom. Translated by Mark Ament
