Brazil foreign accounts see $3.9 bi deficit in February

Brazil’s foreign accounts saw a negative balance of $3.904 billion in February, the Central Bank reported today (Mar. 15). The result is the biggest for February since 2018 ($5.02 billion). These are referred to as current transactions, and comprise purchases and sales of goods and services as well as income transfers between Brazil and other nations.

Compared to February last year, the deficit in such transactions was reported up $570 million, due to, for instance, a lower surplus in the balance of trade (good bought and sold) and an even larger deficit in service accounts (international travel, equipment lease deals, etc.).

In the first two months of the year, the deficit reached $15.784 billion, against the $12.379 billion in the same period in 2019. In the 12 months ending in February 2020, this figure added up to $52.9 billion (2.91 percent of the GDP), compared to $52.3 billion (2.85 percent of the GDP) ending in January 2020. The 12-month value is the highest since December 2015, when the deficit totaled $54.5 billion.

International travel

For international travel, the revenues of foreigners traveling in Brazil amounted to $478 million, with Brazilians’ expenditures overseas standing at $881 million.

Since the statistics released today refer to February, said Central Bank Statistics head Fernando Rocha, the impact of the coronavirus pandemic is yet to be gauged.

Investment

Incoming capital in direct investment in the country added up to $5.996 billion net in the month, compared to the $7.682 billion in February 2019. Direct investment is the best way to cover the negative balance in current transactions, as funds are put towards the production sector.

In the first two months, the inflow of capital reached $11.615 billion net, against the $13.510 billion reported for January– February 2019.

In the 12-month time span ending in February 2020, direct investment totaled $76.7 billion—4.22 percent of the GDP—compared to $78.3 billion—4.28 percent of the GDP—in the previous month.