Brazil posts biggest current account deficit in November for 7 years

BRASILIA, Dec.22 (Reuters) – Brazil recorded a current account deficit of $ 6.5 billion in November, the largest of the month since 2014, the central bank said on Wednesday, amid deteriorating trade figures.

The deficit was slightly higher than the $ 6.3 billion forecast in a Reuters poll of economists. In the 12 months leading up to November, the deficit reached 1.9% of gross domestic product, the highest since September 2020.

On the capital flow side, foreign direct investment in November amounted to $ 4.6 billion, the central bank said, more than the $ 3.8 billion forecast.

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In November, the trade balance deficit reached $ 2.5 billion, from a surplus of $ 1.7 billion the same month last year, as imports increased 45.6% year-on-year while exports increased by 17.1%.

From January to November, the current account deficit was $ 22.4 billion, compared to a deficit of $ 16 billion for the same period in 2020.

Earlier this year, the central bank estimated that there would be a current account surplus in 2021, which would be the country’s first since 2007. However, trade balance data led to a complete reversal of those expectations. .

In its recent inflation report, the central bank lowered its 2021 trade surplus forecast to $ 35 billion, from $ 70 billion forecast in March, and revised its current account outlook for 2021 to $ 30 billion. of dollars against a surplus of $ 2 billion.

Based on partial data already available for December, the central bank said it expects a current account deficit of $ 6.8 billion and FDI inflows of $ 3 billion during the month. .

Investors invested net $ 989 million in Brazilian stocks and bonds in November. Stocks registered an inflow of $ 155 million and debt securities attracted $ 833 million, the central bank said.

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Report by Marcela Ayres; Editing by Giles Elgood, Kirsten Donovan

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