Deficit in external accounts drops 40% in 1st quarter, informs Central Bank

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Inflow of foreign direct investment into the country, in turn, also showed a slight drop. Spending by Brazilians abroad exceeded US$ 1 billion last month. The country’s external accounts registered a deficit of US$ 11.82 billion in the first quarter of this year, informed the Central Bank this Tuesday (25). This represents a drop of 40% compared to the same period last year — when the negative result totaled US$ 16.56 billion. The result in current transactions, one of the main indicators of the country’s external sector, is formed by the trade balance (trade in products between Brazil and other countries), services (acquired by Brazilians abroad) and income (remittances of interest, profits and dividends from Brazil abroad). In March alone, external accounts showed a surplus of US$ 286 million. It was the first positive balance since June 2022 (+US$ 266 million). In March 2022, the external accounts showed a deficit of US$ 3.01 billion. According to the BC, the positive result in the external accounts in March is mainly related to last month’s record trade surplus, in addition to a smaller negative result in the services account (which includes trips abroad). The Central Bank projects a deficit of US$ 49 billion in the external accounts this year. Direct foreign investment At the same time, according to the Central Bank, direct foreign investment in the Brazilian economy recorded a small drop in the first three months of this year, to US$ 21 billion. In the same period last year, they totaled US$ 22.77 billion. In March alone, still according to the institution, direct investments in the country totaled US$ 7.67 billion, against US$ 6.87 billion in the same month of 2022. The inflow of investments in the country is generally related to the behavior of the Gross Domestic Product (GDP) — which has been recording a slowdown due to the rise in basic interest rates in the economy. Currently, to contain inflationary pressures, the rate is at 13.75% per year, the highest level in over six years. The Central Bank estimates an inflow of US$ 75 billion in direct foreign investment in the Brazilian economy this year. The financial market, in a survey conducted by the BC last week with more than 100 institutions, estimates an inflow of US$ 80 billion in direct investments in 2023.

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