Brasília – In July this year, Brazil posted a US$ 6.018 billion current account deficit, down from US$ 8.969 billion in July 2013, but up from US$ 3.647 billion in June this year. Year-to-date through July, the deficit was US$ 49.33 billion, as against US$ 52.15 billion in the same period last year. The figures have been released this Friday (22nd) by the Brazilian Central Bank (BC).
The trade surplus has helped counter the current account deficit in July. The surplus was US$ 1.574 billion last month, driving down the deficit to US$ 918 million year-to-date through July. “Much of it is due to imports. Oil, soy and iron ore have been relevant to this trade balance scenario. [The trade balance] was a key driver in the current account in July,” said the head of the BC’s Economic Department, Túlio Maciel.
Overseas spending by Brazilians, however, amounted to US$ 2.415 billion in July, the highest result ever since records started being kept in 1995. Year-to-date through July, overseas spending reached US$ 14.9 billion, as against US$ 14.403 billion in the same period of 2013. In July last year, spending stood at US$ 2.194 billion.
Overseas spending has climbed despite Brazil’s hosting of the FIFA World Cup from June 12th to July 13th. Maciel argued, however, that overseas spending has seen year-on-year growth of 20% in the past, whereas now the rate is 3.5%. “International travel spending has levelled off,” he said. He noted that the real-to-dollar ratio is “crucial” when it comes to Brazilians deciding whether to spend money abroad.
Foreign travellers spent a combined US$ 789 million in Brazil in July this year, as against US$ 540 million in July 2013. Year-to-date through July, foreigners spent US$ 4.436 billion in Brazil, as against US$ 4.02 billion in the same period of 2013.
As a result, the international travel account showed a US$ 1.625 billion deficit in July this year, as against US$ 1.654 billion in July 2013. These figures are part of the so-called services account (international travel, transportation, equipment rental, insurance and others), which ran a US$ 4.546 billion deficit in July this year and a US$ 27.135 billion deficit year-to-date through July.
Maciel, however, still expects the World Cup to influence current account results, since part of the expenses incurred by foreigners in Brazil consists of credit card transactions due to be cleared this month. An additional US$ 150 million should originate from air travel expenses. In all, the World Cup in Brazil should entail US$ 950 million in extra revenues.
The income account (profit and dividend remittances, interest payments and wages) ran a US$ 3.125 billion deficit last month, as against US$ 3.294 billion in July 2013. Year-to-date thorugh July, the income account posted a US$ 22.153 billion deficit, as against US$ 23.073 billion in the same period of 2013.
Net inflow of unilateral current transfers (donations and remittances of US dollars from Brazil to foreign countries and vice versa, with no counterpart in services or goods) stood at US$ 170 million in July and US$ 877 million year-to-date, as against US$ 276 million and US$ 2.818 billion, respectively, in equal periods in 2013.
*Translated by Gabriel Pomerancblum
