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Brazil's Deficit Skyrockets in July
27 Aug
Summary
- July's current account deficit reached $8.11 billion, surpassing expectations.
- Services and factor payments deficits grew significantly in July.
- Foreign direct investment fell below forecasts in July.
Brazil's current account deficit significantly exceeded projections in July, reaching $8.11 billion. This represents the largest deficit for the month since 2019, indicating a considerable deterioration in the country's external accounts.
The central bank reported that the deficit was driven by a widening services deficit and an increased factor payments account deficit. Concurrently, Brazil's trade surplus diminished as import growth outpaced export growth.
Further contributing to the economic picture, foreign direct investment in July was $7.46 billion, falling short of median forecasts and the amount seen in July of the previous year. Despite this decrease, FDI remained sufficient to cover the current account deficit on a rolling 12-month basis.
