Brazil current account deficit narrows in September

By: | at 12:28 PM | International Trade  

Brazil posted a current account deficit of $2.629 billion in September, central bank data showed.

The country had been expected to post a deficit of $1.8 billion, according to the median forecast of 22 analysts in a Reuters poll. Brazil’s current account deficit in August was $5.505 billion.

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

A widening deficit contributed to a sharp depreciation of Brazil’s currency between May and August, when global risk aversion spiked on prospects of a change in U.S. monetary policy.

Brazil, a major producer of meat, soy and iron ore, posted a stronger-than-expected trade surplus of $2.15 billion in September. Brazil has seen its exports shrink on tepid demand abroad and a drop in the value of commodities, while imports have remained robust.

In the 12 months through September, the current account deficit was equivalent to 3.6 percent of gross domestic product, unchanged from August.

The country also had a current account deficit of $2.6 billion in September of 2012.

Foreign direct investment in Latin America’s largest economy was $4.770 billion in September, in line with market expectations of $4.8 billion.

Central bank chief Alexandre Tombini said earlier this year that the current account deficit was “manageable” and that he expects it to fall back to around 3 percent of GDP. (Reuters)


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