Brazil’s current account deficit expanded to $8.11 billion in July, the largest shortfall for the month in seven years, according to data released on Thursday.
The deficit surpassed the $6.6 billion shortfall forecast by economists in a Reuters poll, reflecting broader pressures on the country’s external accounts. The services deficit grew by approximately $500 million from a year earlier, while the factor payments account deficit increased by roughly $400 million. The trade surplus contracted by about $200 million year-over-year as import growth outpaced exports.
Foreign direct investment (FDI) totaled $7.46 billion in July, below the median forecast of $7.92 billion and down from $8.4 billion a year prior. On a rolling 12-month basis, FDI eased to 3.50% of gross domestic product (GDP).
The current account deficit widened to 2.49% of GDP over the past 12 months, up from prior readings. A sustained current account deficit can pressure the Brazilian real by increasing net U.S. dollar outflows from the economy.
