Itaú BBA - $3.9 billion current account deficit in February

Macro Brazil

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$3.9 billion current account deficit in February

marzo 25, 2020

In the coming months, the current account deficit is expected to recede due to slower economic activity and a weaker exchange rate.


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

 

 The current account posted a $3.9 billion deficit in February 2020, which was wider than our forecast and market estimates (both at -$3.3 billion). The income account, and interest payments in particular, represented the main difference vs. our forecast.   

 The current account deficit over 12 months amounted to $52.9 billion, or 2.9% of GDP.

 In the coming months, the current account deficit is expected to recede in the face of slower economic activity and a weaker exchange rate. Items such as international travel, transportation and profits and dividends will probably be affected the most. The impact on the trade balance is still uncertain as both imports and exports are expected to decline amid shrinking global trade.

 For the next years, we expect current account deficit to hover between 2.5% and 3.0% of GDP. Even at a higher level, the current account deficit will still be comfortably financed by foreign direct investment.

 

Julia Gottlieb
Thales Caramella


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



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