Current account surplus the highest since 2007
24 de junho de 2016
Brasília – Brazil posted a current account surplus for the second month straight in May, the Central Bank reported this Friday (24). The results were USD 1.2 billion in May and USD 412 million in April.
The surplus in May was the highest on record since USD 1.233 billion in August 2007. From January through May, a USD 5.966 billion deficit was registered, a major drop from USD 35.325 billion from Jan-May 2015.
According to the head of the Central Bank’s Economic Department, Tulio Maciel, the May result came as a surprise, since a USD 200 million deficit was expected. Maciel said the trade balance outperformed expectations with a USD 6.251 billion surplus, tipping the current account result into a surplus as well. “Basically, this month’s surprise was the improved trade balance performance, whose surplus was higher than expected,” he said.
In June, the Central Bank expects the current account to swing back to a deficit due to the narrower trade balance numbers often seen at this time of the year as a consequence of agribusiness results. A USD 1 billion current account deficit is expected this month.
The Central Bank revised down its current account deficit projection for this year from USD 25 billion to USD 15 billion. The Gross Domestic Product (GDP) shrinkage expectation is now down from 1.48% to 0.87%.
The 2016 trade surplus forecast changed from USD 40 billion to USD 50 billion. The services account (international travel, transportation, equipment rental, insurance, etc.) is seen running a USD 28.3 billion deficit, moderately less than the prior USD 28.6 billion forecast.
The primary income account (profits and dividends, interest payments and wages) is expected to run a USD 39.7 billion deficit, down from a previous forecast of USD 39.3 billion.
The secondary income (donations and US dollar remittances with no corresponding services rendered or goods sold) should post a USD 3 billion surplus, up from 2.9 billion as per March forecasts.
The Central Bank believes foreign direct investment should reach USD 70 billion in Brazil this year, more than enough to offset the current account deficit. The last forecast had been USD 60 billion.
Translated by Gabriel Pomerancblum