External account deficit and foreign investment inflows fall until April, says BC

Numbers were released this Friday (26). Spending by Brazilians abroad surpassed US$ 1.2 billion last month. The deficit in the external accounts and the inflow of foreign direct investment into the Brazilian economy declined in the first four months of this year, informed the Central Bank this Friday (26). According to the institution, the external accounts registered a deficit of US$ 13.67 billion from January to April, compared to a negative result of US$ 16.46 billion in the same period last year. 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 April alone, the external accounts showed a deficit of US$ 1.68 billion, against a surplus of US$ 100 million in the same month of 2022. According to the BC, the fall in the negative balance of the external accounts, in part of that year , is mainly related to the improvement in the trade balance in the period. The Central Bank projects a deficit of US$ 49 billion in the external accounts this year. Foreign investments At the same time, according to BC, direct foreign investments in the Brazilian economy also registered a drop in the first four months of this year, to US$ 24.31 billion. In the same period last year, they totaled US$ 33.85 billion. In April alone, still according to the institution, direct investments in the country totaled US$ 3.31 billion, against US$ 11.08 billion in the same month of 2022. The inflow of investments in the country is usually 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 BC last week with more than 100 institutions, estimates an inflow of US$ 80 billion in direct investments in 2023. Spending by Brazilians abroad Spending by Brazilians abroad totaled US$ 1.23 billion in April this year, with an increase compared to the same month last year – when they totaled US$ 1.09 billion. Spending by Brazilians abroad has not yet returned to pre-pandemic normality. In March 2018 and 2019, for example, these expenses totaled US$1.52 billion and US$1.32 billion, respectively. In addition to the pandemic, the expenses of Brazilians abroad are also influenced by other factors, such as the level of economic activity and the price of the dollar, used in international transactions. In 2022, the US currency closed down 5.3%, quoted at R$ 5.2780. Despite this, it still remained well above the 2019 level – it ended that year at BRL 4.0098. This Thursday, the dollar closed at a high, resuming the level of R$ 5. See more quotes The level of activity is already slowing down with the high basic interest rate in the economy. After an increase of 5% in 2021, the Brazilian GDP grew by 2.9% last year. And, for 2023, the market projection is for an even smaller expansion, of 1.2%.



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