Brazil Reports US$ 1.375 Billion Current Account Deficit for September

Brazil recorded a current account deficit of $1.375 billion in September, as reported by the Central Bank on Monday. In the same month of 2022, the current account balance was negative at $6.94 billion.

In the trailing 12 months, the difference between what the country spent and earned in international transactions related to trade, income, and unilateral transfers was negative at $39.832 billion, equivalent to 1.92% of the Gross Domestic Product (GDP) estimated by the monetary authority.

For 2023, the Central Bank forecasts a current account deficit of $36 billion, as disclosed in the latest Quarterly Inflation Report (QIR).

Net inflow of Foreign Direct Investment (FDI) amounted to $3.752 billion in September. In the same month of the previous year, FDI had reached $9.628 billion.

FDI includes resources intended for capital participation and direct loans granted by parent companies of multinational enterprises to their subsidiaries in the country and vice versa. The return on Brazilian investments abroad is also part of these statistics.

Over the 12 months ending in September, FDI totaled $60.042 billion, or 2.89% of GDP, compared to 3.91% in the same period in 2022. The amount is more than sufficient to cover the current account deficit.

The Central Bank forecasts an FDI of $65 billion for 2023, as per the QIR.

Foreign portfolio investments had a net inflow of $1.414 billion in September. In the same period in 2022, there was an outflow of $3.286 billion.

In the fixed-income market, there was a net inflow of $1.891 billion in September. Considering only domestic market transactions in this segment, the result was positive at $2.311 billion.

On the other hand, the flow of foreign investments in equities through stock exchanges resulted in an outflow of $481 million in the month, considering investments in both the Brazilian and New York Stock Exchanges.

For 2023, the Central Bank calculates a net inflow of $10 billion in portfolio investments.

The net remittance of profits and dividends from companies to foreign countries stood at $3.369 billion in September, lower than the amount recorded in September 2022, which was $5.064 billion.

The Central Bank projects a net remittance of $42 billion in profits and dividends for 2023.

Source: Valor Econômico

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