Itaú BBA - Current account deficit ends 2019 at 2.8% of GDP

Macro Brazil

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Current account deficit ends 2019 at 2.8% of GDP

enero 27, 2020

The current account posted a $5.7 bn deficit in December, leading the 2019 deficit to $50.8 bn (2.8% of GDP)


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

  The current account posted a $5.7 billion deficit in December, which was wider than our forecast (-$4.2 billion) and market estimates (-$4.6 billion). Compared to our forecast, the main difference was on the profits and dividends account, with larger-than-expected net remittances.   

 The current account deficit over 12 months amounted to $50.8 billion, or 2.8% of GDP, in 2019. The main driver behind the increase vs. 2018 (-$41.5 billion, or 2.2% of GDP) was the shrinking trade deficit, particularly slowing exports. The service deficit remained virtually stable in the period, while the income deficit receded, partly offsetting the deteriorating trade balance.

 For the next years, we expect current account deficits around 2.5%-3.0% of GDP, in line with the economic rebound. In our view, 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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