Itaú BBA - Lower-than-expected income deficit leads to narrower current account deficit in November

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Lower-than-expected income deficit leads to narrower current account deficit in November

December 21, 2018

Current account deficit remains at a historically-low level

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

The current account had a $795 million deficit in November, printing below our estimate (-$3.0 billion) and below market consensus (-$1.9 billion). Interest payments and, to a lesser extent, the profit and dividends account were the main surprises, as their deficits receded later in the month. The latest result kept the current account deficit at a historically-low level. For the next years, we maintain our expectation of a gradual increase in the current account deficit, driven by somewhat of a rebound in economic activity (reducing the trade surplus), but not to the point of compromising the sustainability of Brazil’s external accounts. Direct investment in the country is still the main source of financing for the current account deficit.

Julia Gottlieb
Thales Caramella

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



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