Brasília – Brazil’s current account deficit – i.e. the record of purchases and sales with the rest of the world – stood at US$ 9.018 billion in July, according to figures released by the Central Bank this Friday (23rd). In July last year, the deficit was much lower: US$ 3.746 billion.<\/p>\n
From January through July, the current account deficit was US$ 52.472 billion, as against US$ 28.990 billion from January through July 2012. The result was equivalent to 3.95% of everything the country produces – the Gross Domestic Product (GDP). In the same period last year, the rate was 2.24%.<\/p>\n
From January through July, the trade balance posted a US$ 4.989 billion deficit. International travel, transport, equipment rental, insurance and others was down US$ 26.222 billion, and remittances of profits and dividends, interest payment and wages posted a US$ 23.073 billion deficit.<\/p>\n
The net inflow of dollar donations and remittances to and from Brazil, with no services or goods involved, stood at US$ 1.813 billion in the first seven months this year.<\/p>\n
The Central Bank figures also show that foreign direct investment, which goes into the country’s productive sector, stood at US$ 5.212 billion in July and US$ 35.239 billion in the first seven months. These investments did not suffice to offset the current account deficit. <\/p>\n
Even though foreign direct investment is the best suited investment to finance the deficit, due to the fact that it takes place on the long term, the country has other ways of covering up its current account deficit. One such way is foreign investment in shares traded in Brazil and abroad, which amounted to a net US$ 269 million in July and US$ 6.547 billion year-to-date through July. Net investment in fixed income bonds traded in Brazil stood at US$ 4.235 billion, last month, and US$ 15.272 billion year-to-date through July.<\/p>\n
*Translated by Gabriel Pomerancblum<\/strong><\/p>\n