Itaú BBA - Current account surplus of $868 million in March

Macro Brazil

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Current account surplus of $868 million in March

abril 24, 2020

$868 million current account surplus in March due to surprises in both services and income accounts


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

 The current account posted a surplus of $868 million in March 2020, which was better than our call and market estimates (both pointing to a deficit of $200 million). The service account (international travel and equipment rentals) and the income account in particular (lower deficit associated with profits and dividends) deviated from our forecast.   

 No monthly surplus had been recorded in the current account since June 2017. 

 The current account deficit over 12 months narrowed to $49.7 billion or 2.8% of GDP (from $53.2 billion or 3.0% of GDP).

 Slower economic activity, a weaker exchange rate and increased social distancing are showing their early signs on the current account, with significant declines in deficits related to international travel, and profits and dividends.

 For the next years, we expect current account deficits of 2.0% to 2.5% of GDP, comfortably financed by foreign direct investment. Current figures, however, add downside to our forecasts.

 

Julia Gottlieb
Thales Caramella


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



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