Brazil’s FDI Turned Negative While The Current Account Improved In December

Key Points

• The current account deficit narrowed to US$3.4 billion in December 2025, from US$10.2 billion a year earlier.
• Net foreign direct investment swung to a US$5.2 billion outflow, driven by an US$11.4 billion reinvested-earnings outflow.
• Over 2025, FDI still exceeded the current account gap, but monthly swings can shake currencies and funding costs.

Brazil finished 2025 with a stronger trade snapshot, but a volatile financing line. The current account deficit shrank in December, helped by a larger goods surplus and a smaller services gap.

Yet foreign direct investment, a key anchor for the balance of payments, turned negative in the same month. The current account deficit was US$3.4 billion in December 2025, versus US$10.2 billion in December 2024.

The goods balance posted an US$8.8 billion surplus, up from US$4.1 billion. Exports were US$31.2 billion and imports were US$22.4 billion. Services remained a drain, but less so.

The services deficit narrowed to US$3.8 billion from US$5.0 billion. Primary income stayed deeply negative at US$9.2 billion, reflecting profit remittances and interest payments. It still improved from the prior year.

The shift came from direct investment in the country. December recorded net outflows of US$5.2 billion, compared with a US$160 million net inflow a year earlier.

The decisive line item was reinvested earnings, which showed a net outflow of US$11.4 billion. In practice, companies distributed more profits than they booked for the month, flipping the net result.

For the full year, the picture was steadier. Brazil’s 2025 current account deficit totaled US$68.8 billion, about 3.02% of GDP. Net direct investment totaled US$77.7 billion, about 3.41% of GDP, meaning longer-term capital still covered the gap.

Still, month-to-month reversals matter. They can amplify exchange-rate volatility, complicate inflation expectations, and raise the cost of external funding.

International reserves ended December at US$358.2 billion, down US$2.3 billion from the prior month. The central bank also revised profit data for the second and third quarters.

It adjusted reinvested-earnings estimates, reducing recorded direct investment inflows and the current account deficit by US$1.2 billion.

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