Brazil current account gap shrinks to 2% of GDP in July, but portfolio outflows return
By Jamie McGeever
BRASILIA, Aug 25 (Reuters) - Brazil's balance of payments position with the rest of the world strengthened in July as it posted a current account surplus for a fourth month in a row, official figures showed on Tuesday, although investors pulled funds out of Brazilian stocks and bonds.
The current account surplus of $1.6 billion in July was more than double the $737 million forecast in a Reuters poll of economists and the fourth month in a row of surplus, something not seen since 2006.
That helped narrow the overall deficit over the preceding 12 months to 2.00% of gross domestic product, the narrowest gap since November, 2018. In March and April the 12-month deficit was running at more than 3% of GDP.
Goods exports fell 2.6% from a year earlier to $19.7 billion, while goods imports slumped 33.7% to $12.3 billion, the central bank said. The services deficit narrowed 47% to $1.8 billion, and the primary income deficit halved to $4.1 billion, it added.
Foreign direct investment in July totaled $2.7 billion, the central bank said, which was slightly more than the $2.5 billion economists had expected.
The central bank said it forecasts net FDI of $1 billion in August, and a current account surplus of $2.2 billion.
On the portfolio side, however, Brazil posted an overall net outflow of $960 million in July, failing to build on June's $5.5 billion inflow which had followed months of coronavirus-fueled selling.
Domestic stocks attracted $330 million inflows and domestic debt markets attracted $553 million, the central bank said. But these were canceled out by a hefty $1.8 billion outflow from Brazilian debt instruments traded overseas, the biggest selloff in a year.
(Reporting by Jamie McGeever; Editing by Alison Williams and Alistair Bell)
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