Brazil external accounts report $3.404 billion deficit in July

After four consecutive months in the black, Brazil's external accounts reported a deficit in July. The negative balance in current transactions—sales and purchases of goods and services, as well as income transfers between the country and the world—stands at $3.404 billion, the Central Bank stated today (Aug 23).

The balance of trade helped reduce the deficit with a $3.049 billion surplus in the same month. The services account (international travel, transport, equipment lease, insurances, etc.), however, presented a negative $3.007 billion. The account for primary income (profits and dividends, interest payments and salaries) saw a $6.597 billion deficit. Secondary income (revenues generated in an economy and distributed within another, such as donations and dollar remittances, in exchange for services or goods) stood at a positive $144 million.

When the country posts a negative balance in its current transactions, it must settle the deficit with investments and loans overseas. The best way to go about it is direct investment, as funds go straight to the production sector. In July, these investments added up to $4.093 billion, with an accumulated $40.364 billion in the seven months of the year.

Translated by Fabrício Ferreira