Itaú BBA - $729 million current account surplus in May

Macro Brazil

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$729 million current account surplus in May

June 25, 2018

At the margin, the current account deficit increased somewhat in May

For the version with all charts and tables, please open the attached pdf file 

The current account posted a $729 million surplus in May, above our estimate ($550 million) but below market consensus ($935 million). Still, over 12 months, the current account deficit widened at the margin, due to the narrower trade surplus (impacted by the truckers’ strike) and wider service and income deficits. For the next years, we maintain our expectation of a gradual increase in the current account deficit — in line with some rebound in economic activity (reducing the trade surplus) and due to the large stock of foreign investment in the country (which should pressure the profits and dividends line) —, but not to the point of compromising Brazil’s external sustainability. Although direct investment in the country stabilized at a lower level, this is still the main source of financing for the current account deficit.

Julia Gottlieb

For the version with all charts and tables, please open the attached pdf file 



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