Itaú BBA - Current account deficit: stability at the margin

Macro Brazil

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Current account deficit: stability at the margin

mayo 24, 2018

Over 12 months, the current account deficit remains low

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

The current account posted a $620 million surplus in April, below our estimate ($900 billion) and market consensus ($1.2 billion). Over 12 months, the current account deficit remains low, aided by the good performance of the trade balance, and low deficits in equipment rentals and in the profits and dividends account. For the next years, we maintain our expectation of a gradual increase in the current account deficit — in line with the 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. Notwithstanding a decline in direct investment in the country in the past 12 months, this is still the main source of financing for the current account deficit.

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



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