Brazil’s external accounts with deficit of US$843 million in June, offset by direct investment of US$1.9 billion

In June 2023, Brazil’s external accounts experienced a deficit of US$843 million, a stark contrast from the surplus of US$ 266 million in the same month the previous year.

However, a total of US$1.9 billion in direct investment in the country was reported, counteracting the deficit.

The Central Bank unveiled this data on July 26.

The Bank’s monthly calculation of Brazil’s current transactions takes into account the trade balance, services bought by Brazilians abroad, and incoming funds such as remittances of interest, profits, and dividends.

June 2023 marks the first deficit for the month in four years, with the preceding one in 2019 amounting to US$2.96 billion.

The trade balance indicated a surplus of US$8.6 billion in June, a rise from US$7.3 billion in June 2022.

Although exports and imports fell by 8.7% and 16.1% respectively, primary and secondary income deficits increased the negative balance by US$ 3.08 billion, contributing to the overall deficit.

The current account deficit over the last 12 months until June totaled US$ 50 billion, representing 2.5% of the Gross Domestic Product.

This marks an increase from May’s deficit of US$48.9 billion.

Despite being 64% lower than the previous year’s June total, direct investment ameliorated the account deficit.

These investments totaled US$ 80 billion over 12 months, accounting for 4.01% of GDP.