São Paulo – Brazil posted a record-high current account deficit last year. According to figures released this Friday (23rd) by the Central Bank, the net result from transactions between Brazil and other countries was negative by US$ 90.948 billion in 2014, the worst result since 1947, when records started being kept. In 2013, the deficit had been US$ 81.108 billion. The government’s forecast for 2014 was for a US$ 86 billion deficit.<\/p>\n
According to information from the federal government’s news agency Agência Brasil<\/em>, the deficit is equivalent to 4.17% of Gross Domestic Product (GDP). The ratio is the worst since 2001, when the deficit stood at 4.19% of GDP.<\/p>\n Last year, the balance of services, comprising spending on travels, transportation, equipment rental and insurance, had a US$ 48.667 billion deficit, against a US$ 47.096 billion deficit in 2013.<\/p>\n Brazilians spent US$ 25.608 billion abroad last year, an all-time high and up 2.48% from 2013. Foreigners spent US$ 6.914 billion in Brazil in 2014. The resulting travel account deficit was US$ 18.695 billion.<\/p>\n The head of the Central Bank’s Economic Department, Tulio Maciel, said the high dollar will tend to cause foreign travel by Brazilians to slow down. <\/p>\n As for the current transaction deficit, Maciel attributed the performance to the balance of trade, which ran a deficit last year. He believes the trade balance will fare better this year due to an export-friendly exchange rate, growing international trade, and an expected improvement in the oil-account (transactions involving petroleum and its products). The trade deficit was US$ 3.93 billion.<\/p>\n The income account, i.e. payments of interest and wages and profit and dividend remittances, posted a US$ 40.273 billion deficit in 2014.<\/p>\n Still according to Central Bank data, the net inflow of unilateral current transfers, i.e. donations and remittances or US dollar transfers without an item of economic value received in return, amounted to US$ 1.9 billion, down 42.9% from 2013.<\/p>\n Investments and reserves <\/strong> <\/p>\n Brazil was targeted by US$ 62.495 billion in foreign direct investment (FDI) in 2014, down 2.4% from US$ 63.996 billion in 2013. By the end of the year, the country had US$ 374.1 billion in foreign exchange reserves and a gross external debt of US$ 347.6 billion.<\/p>\n *Translated by Gabriel Pomerancblum<\/strong><\/p>\n