Brazil back to current account deficit

26 de julho de 2016

Brasília – Following two straight months on surpluses, Brazil registered a USD 2.479 billion current account deficit in June, the Central Bank reported this Tuesday (26).

In the first half of the year, the current account result – i.e. sales and purchases of goods and services and net cash transfers – was a USD 8.444 billion deficit, down from a USD 37.888 billion deficit in H1 2015.

The primary income account (profits and dividends, interest payments and wages), which is one component of the current account, ran a USD 2.873 billion deficit in June and a USD 17.554 billion deficit in all of H1.

The services account (international travel, transportation, equipment rental, insurance etc.) posted a USD 3.594 billion deficit in June and USD 14.817 billion deficit in H1.

The secondary income account (donations and remittances with no corresponding rendering of services or provision of goods) had surpluses of USD 234 million in June and USD 1.479 billion in H1.

In trade, there was a USD 3.755 billion surplus in June and a USD 22.448 billion surplus in H1.

Foreign investment

Foreign direct investment (FDI) in Brazil – i.e. investments made in the country’s productive sector – reached USD 3.917 billion in June, down from USD 5.397 billion in June 2015, but higher than the current account deficit and therefore enough to offset it.

In H1, FDI stood at USD 33.816 billion, up from USD 30.932 billion in H1 2015, and also enough to make up for the current account deficit.

Investments in Brazilian companies’ shares at domestic and foreign stock exchanges amounted to USD 2.162 billion in June and USD 5.988 billion in H1. Investment in securities traded in Brazil stood at USD 1.071 billion in June, but outbound securities investment during H1 exceeded inbound investment, leading to a deficit to the tune of USD 11.389 billion.

*With information from ANBA. Translated by Gabriel Pomerancblum