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Brazil's current account deficit doubles in July from a year ago

Monday, August 26th 2013 - 02:22 UTC
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Foreign direct investment is the first seven months totalled 35.239 billion dollars Foreign direct investment is the first seven months totalled 35.239 billion dollars

Brazil's current account deficit more than doubled in July from a year ago, according to the latest Central bank data. The gap reached 9.08 billion dollars in July, while a year ago the deficit was 3.75bn dollars.

The current account is a country's broadest measure of foreign transactions encompassing trade, profit remittances, interest payments and other items.

In the first seven months of this year, the country has accumulated a current account gap of 52.472bn, nearly double the 28.99bn posted in the same period a year ago.

Even so, foreign direct investment during the same period this year totalled 35.239bn, lagging the 38.169bn of FDI in same period last year.

Unless there is a surge of FDI, it seems increasingly improbable that direct investment from abroad will cover the current account gap. FDI falls into the capital account of the balance of payments and has in past years offset current account deficits.

The widening current account helps explain the Brazilian currency's sharp depreciation over the last few months, which has been exacerbated by expectations of a scale back in US monetary stimulus that triggered an exodus of capital from emerging-market nations.

For July, FDI in the country fell to 5.212bn in July from 7.17bn in June. In the 12 months through July, the current account deficit was equivalent to 3.39% of GDP, up from 3.17% in May.
 

Categories: Economy, Brazil.

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  • ChrisR

    And Uruguay's PhD in Economic History adviser has stated we need to devalue the URU Pesos to match the Real.

    Does this idiot not realise he wasted his time at University? There is one thing that ALL investors should realise and is always stated on investments (by LAW) in the UK: your investment can go down as well as up and previous results are no guide to future performance.

    Brazil are rapidly making a complete bollocks of their economy because they have no one but the liar Mantega setting “policy”. What the policy is remains a mystery because they do not publish “it” so how can the future intentions of possible investors be turned into reality with any confidence: they cannot.

    The whole thing is in danger or unravelling big time.

    Aug 26th, 2013 - 09:31 am 0
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