Brazil April Current Account Gap Wider Than Economists Forecast

Brazil’s current account deficit in April was wider than economists forecast, as a weaker real this year has failed to improve the trade balance.

The deficit in the current account, the broadest measure of trade in goods and services, widened in April to $6.9 billion from $5.74 billion a month earlier, the central bank said in a report distributed today in Brasilia.

Foreign investment in Brazil during the month rose to $5.78 billion from $4.26 billion. Economists surveyed by Bloomberg forecast a deficit of $6.78 billion and FDI of $4.3 billion for last month.

Brazil’s current account gap has hovered near a record as a percentage of gross domestic product even as the real falls the most among emerging market currencies since January.

 The central bank expects the annual deficit to narrow by the end of the year on the back of higher commodity prices and slower economic growth.

Finance Minister Joaquim Levy is also seeking to improve fiscal accounts to boost confidence and attract foreign investment for infrastructure projects.

Swap rates on the contract due in January 2016, the most traded in Sao Paulo today, rose six basis points, or 0.06 percentage point, to 13.79 percent at 10:34 local time.

The real weakened by 1 percent to 3.1288 per U.S. dollar and has dropped 15 percent this year, the most among 24 emerging-market currencies tracked by Bloomberg.

April marked the second month that the central bank used a new methodology for calculating the current account and foreign investment in Brazil.

bloomberg.com