Leak in exterior accounts nearly triples till September and reaches US$ 29.6 billion, factors out Central Financial institution
- October 25, 2022
- No Comment
Foreign investments, however, reached US$ 70.66 billion in the period, the highest value in 11 years, and were sufficient to finance the shortfall in foreign accounts.
The country’s external accounts recorded a deficit of US$ 29.58 billion in the first nine months of the year, almost triple the same period last year (US$ 11.35 billion). The information was released this Monday (24) by the Central Bank.
At the same time, however, foreign direct investment in the economy was the highest in eleven years (see further down in this report).
The result in current transactions, one of the main indicators on the country’s external sector, is formed by the trade balance (trade of products between Brazil and other countries), services (acquired by Brazilians abroad) and income (interest remittances, profits and dividends from Brazil abroad).
According to the BC, the increase in the deficit of external accounts in the partial of 2022 is mainly related to a worsening in the service account (more spending abroad, including travel) and income (increase in remittances abroad by companies) .
For the entire year of 2022, the Central Bank expects a worsening in external accounts. The institution’s estimate is a deficit of US$ 47 billion. If confirmed, it will be the largest since 2019 (-US$ 65 billion), that is, in three years.
According to the BC, foreign direct investment in the Brazilian economy totaled US$ 70.66 billion from January to September this year, which represents the highest level since 2011 (US$ 77.78 billion), that is, in eleven years. . The BC historical series begins in 1995.
As a result, investments were more than sufficient to finance the deficit in the external accounts.
In September alone, foreign investment inflows into the country totaled US$ 9.18 billion, with growth compared to the same month last year – when it totaled US$ 4.6 billion.
In twelve months, foreign investments totaled US$ 73.8 billion until September this year, against US$ 69.2 billion in the previous month (August) and US$ 49.9 billion in September 2021.
In the whole of last year, foreign investments in the country totaled US$ 46.441 billion. The BC forecast is that, in 2022, they will reach US$ 66 billion.
Brazilian spending abroad
According to information from the Central Bank, Brazilian spending abroad totaled US$ 907 million in September this year. That ended a six-month streak above the $1 billion mark.
In the accumulated result for the first nine months of this year, according to the BC, Brazilian spending abroad totaled US$ 8.98 billion. This represents an increase of 171% compared to the same period last year (US$ 3.31 billion).
BC figures show that spending by Brazilians abroad has not yet returned to the level of before the pandemic, which began in March 2020.
Prior to Covid-19, expenses were typically above $1.3 billion a month, and could exceed $2 billion in peak season months.
The expenses of Brazilians abroad are influenced by some factors, such as the level of economic activity and the price of the dollar, used in international transactions.
Tickets and hotel expenses, for example, are quoted in foreign currency. Thus, when the dollar is high, Brazilians end up spending more on these items.
This Monday, the dollar operates higher, amid expectations that the Federal Reserve (Fed, central bank of the United States) may slow down the pace of increase in the country’s interest rate and the search for the US currency. American seen abroad.