Brazil January’s current account deficit was the biggest ever posted, central bank data showed, the latest evidence of the rapid deterioration of its balance of payments as Brazilians continue to spend heavily on imports and trips abroad.
The commodities’ powerhouse posted a current account deficit of $$11.591 billion in January, slightly above the previous monthly deficit record of $11.350 billion recorded in January of last year.
The country had been expected to post a deficit of $11.7 billion, according to the median forecast of 20 analysts in a Reuters survey. Brazil’s current account deficit in December was $8.67 billion.
For all of 2013, Brazil’s current account deficit surged to $81.374 billion in all of 2013, the biggest gap since at least 2001. In 2012, the country had an external gap of $54.249 billion.
However, foreign direct investment remains strong in Brazil, financing a large part of its current account gap. FDI falls into the capital accounts section of the balance of payments.
The country attracted $5.098 billion in FDI in January, above market expectations of $4 billion but below the $6.49 billion recorded in December.
After posting its smallest trade surplus in a deficit last year, Brazil continued to post weak trade balance results.
In January, Brazil posted its biggest trade deficit after a fall in exports of semi manufactured and manufactured goods. On the other hand, imports of consumer goods jumped 8.8 percent and that of fuel and lubricants 19 percent from a year ago.
Brazilians spent $1.478 billion in trips abroad in January, down slightly from $1.6 billion in the same period last year. While foreign companies repatriated $2.499 billion in profits and dividends to their headquarters outside the country, up from $2 billion in the same month last year. (Reuters)