Brasília – The balance of purchases and sales of goods and services between Brazil and the rest of the world – known as current account balance – posted a US$ 7.9 billion deficit in September, as against a US$ 2.7 billion deficit in the comparable year-ago period, the Brazilian Central Bank has reported earlier. According to the head of the bank’s economic department, Túlio Maciel, this is the worst result since records started being kept, in 1947.
Year-to-date through September, the deficit stands at US$ 62.7 billion, as against US$ 60.2 billion in the comparable period of 2013.
The services account (international travels, transports, equipment rental and insurance) also ran a deficit in September, at US$ 4.7 billion, up 4.4% from September last year. The balance of trade (exports vs. imports) showed a US$ 940 million deficit. The income account, comprising profit and dividend remittances, interest payments and wages, posted a US$ 2.3 billion deficit.
Whenever a country incurs a current account deficit (spends more than it earns), it must either finance the result via foreign investment or borrow money abroad. Foreign direct investment is considered the best form of financing due to its long-term nature. Other modes of financing include loans and foreign investment in bonds and fixed income.
*Translated by Gabriel Pomerancblum
