Brazil’s foreign account saw a positive balance for the sixth consecutive month in September—$2.32 billion—the Central Bank reported today (Oct. 23). It was the first positive result for a September since 2007 ($482 million) and the highest for the month in the time series initiated in 1995.
Last year, in the same month, a deficit was reported at $2.727 billion in current transactions (foreign accounts), which are purchases and sales of goods and services and income transfers between Brazil and other countries.
“Following the trend of previous months, this reversion came as a result of the $2.1 billion increase in the surplus in the balance trade for goods and the reductions of $2.1 billion and $885 million in the deficits in primary income [profits and dividends, as well as interest and salary payments] and services [international travel, transport etc.], respectively,” the Central Bank states in its report.
From January to October, a deficit of $6.476 billion was posted under current transactions, against $36.748 billion in the same period in 2019.
According to Fernando Rocha, head of the Central Bank’s Statistics Department, the drop in the year-to-date deficit and the positive monthly figures can be explained by the retraction of the demand for goods and services overseas, due to the crisis brought about by the COVID-19 pandemic. “The lower demand for imported goods and services decreases the deficit in current transactions,” he said.
In the 12-month period ending in September, there was a $20.7 billion deficit in current transactions (1.37 percent of the gross domestic product, or GDP), compared to the negative balance of $25.7 billion (1.66 percent of the GDP) in the same period ending in August.