Brazil's GDP is forecasted to expand 5.2% in 2007, up from the original 4.5%, said the Applied Economics Research Institute, IPEA, an office from the Brazilian Executive. The quarterly report indicates that the industrial sector is estimated to grow 6% this year, up 0.8 percentage points above the first estimate.
The IPEA report coincides with Brazil's National Industry Confederation, CNI that also reviewed percentages upwards. CNI points out that domestic demand is playing a pivotal role in the current expansion of the Brazilian economy. Brazil's Central Bank reported that foreign direct investment reached 33.7 billion US dollars in the first eleven months of the year which represents a 106% hike over the same period a year ago. The sum was described "as the highest ever in the country's history". But the bank also revealed a wider-than-expected current account deficit in November, reversing a surplus in external accounts a year earlier as the trade surplus fell and companies boosted profit remittances abroad. The deficit reached 1.3 billion US dollars in November compared with a surplus of 1.39 billion in the same month a year ago, the Central Bank said. In October, Brazil had current account deficit of 42 million US dollars, the central bank reported last month. In the 12 months through November, Brazil posted a current account surplus equal to 0.37% of gross domestic product, GDP, compared with 0.6% in the 12-month period through October. For 2008, the central bank forecast a current account deficit of 3.5 billion US dollars, the first deficit in the external accounts since 2002. The bank estimates foreign direct investment of 28 billion. The current account balance tracks a country's net flow of external transactions, including foreign trade, interest payments and services such as tourism.