Brazil’s balance of payments position with the rest of the world strengthened in July as it posted a current account surplus for a fourth month in a row, figures showed on Tuesday, although investors pulled funds out of Brazilian financial assets.
BRASILIA, Aug 25 (Reuters) - Brazil’s balance of payments position with the rest of the world strengthened in July as it posted a current account surplus for a fourth month in a row, figures showed on Tuesday, although investors pulled funds out of Brazilian financial assets.
The $1.6 billion current account surplus in July was more than double the $737 million forecast in a Reuters poll of economists and the fourth month in a row of surplus, something not seen since 2006.
That helped narrow the overall deficit over the preceding 12 months to 2.00% of gross domestic product, the narrowest gap since November 2018.
Goods exports fell 2.6% from a year earlier to $19.7 billion, while goods imports slumped 33.7% to $12.3 billion, the central bank said. The services deficit narrowed 47% to $1.8 billion, and the primary income deficit halved to $4.1 billion, it added.
The central bank revised the current account deficit in the first half of the year to $13.4 billion from $9.7 billion, mainly due to the revision of a $1.1 billion surplus on primary income to a $3.4 billion deficit.
Foreign direct investment in July totaled $2.7 billion, the central bank said, which was slightly more than the $2.5 billion economists had expected.
The central bank said it forecasts net FDI of $1 billion in August, and a current account surplus of $2.2 billion.
On the portfolio side, however, Brazil posted an overall net outflow of $960 million in July, failing to build on June’s $5.5 billion inflow, which had followed months of coronavirus-fueled selling.
Domestic stocks attracted $330 million inflows and domestic debt markets attracted $553 million, the central bank said. But these were canceled out by a hefty $1.8 billion outflow from Brazilian debt instruments traded overseas, the biggest sell-off in a year.
In the last 12 months, a net $52.3 billion has been pulled from domestic equity and debt markets, the central bank said. (Reporting by Jamie McGeever; Editing by Alistair Bell and Steve Orlofsky)