Brazil’s External Accounts Slip to Worst Mid-Year Gap in a Decade Since 2015

Brazil’s external finances weakened sharply in 2025 despite export strength. In July, the country ran a $7.1 billion current account deficit, up from $5.2 billion a year earlier.

From January to July, Brazil recorded a $40 billion shortfall—the largest mid-year gap since 2015. Cheap Chinese goods drove much of the import surge. China now supplies 26 percent of Brazil’s imports, up from 21 percent in 2024.

Brazil bought $35.7 billion in Chinese products during the first half of 2025, a 22 percent increase. Manufacturers from China filled the void left by US and EU trade barriers.

In August, the US slapped 50 percent tariffs on many Brazilian exports. Shipments to the United States fell 18.5 percent to $4 billion. Chinese purchases rose nearly 30 percent to $7.3 billion, underscoring Brazil’s pivot toward China.

Travel and services added to the strain. Travel outflows hit $5 billion in July, the highest since 2014, as a stronger real made overseas trips cheaper. Meanwhile, interest and profit remittances ballooned, pushing the primary income deficit up 18 percent to $8.9 billion.

These deficits now exceed foreign direct investment inflows. Brazil relies on volatile portfolio funds or growing debt to fill the gap. Its 12-month deficit reached 3.5 percent of GDP, more than double last year’s level.

Behind these numbers lies a structural challenge: Brazil exports mostly commodities while importing manufactured goods. Political friction with the US and dependence on one market make the country vulnerable.

Without diversified exports and firmer fiscal discipline, Brazil risks economic shocks driven by currency swings and sudden capital flight.

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