Brazil foreign accounts closed out 2021 with negative $28.1 bi

Brazil’s foreign accounts, which register purchases and sales of goods and services as well as the exchange of income with other nations, saw a negative balance of $5.9 billion in December, the country’s Central Bank reported today (Jan. 26).

Brazil therefore closed out 2021 with a deficit of $28.1 billion in these current transactions, which account for 1.75 percent of the gross domestic product (GDP).

Investment

When the country posts a negative balance in current transactions, it needs to cover the deficit with investment or loans overseas. The best way to settle it is through direct investment in the country, as funds are brought into the productive sector and tend to be long-turn investment.