- Unexpected surplus came as companies sent less profits abroad
- Economic recession, currency depreciation also had an impact
Brazil recorded an unexpected current account surplus last month, the first since April 2009, as a prolonged economic recession curbed imports and companies sent less profits abroad.
The surplus in the current account, the broadest measure of trade in goods and services, reached $412 million in April after a revised deficit of $857 million in the previous month, the central bank said Tuesday. Foreign investment in Brazil rose to $6.82 billion from $5.56 billion in the same comparison. Economists surveyed by Bloomberg forecast a gap of $900 million and foreign investment of $6.15 billion for April.
The result was also a surprise for policy makers, said Tulio Maciel, the head of the bank’s economic research department. “The April surplus came in earlier than we expected,” he told reports in Brasilia, forecasting however a $200 million current account deficit for May.
Demand for imports has been tanking in Brazil as the economy enters its second year of recession. Add to that a 25 percent depreciation in the Brazilian real since the beginning of 2015, which has also supported exporters. The country’s 12-month gap in external accounts dropped to 1.97 percent of gross domestic product in April from 2.39 percent in the previous month.
The April result got a boost as multinational companies remitted only $574 million in profits and dividends to their headquarters, a quarter of what they sent abroad a year ago, according to MCM Consultores Associados,
Foreign investors’ appetite for Brazil also remained strong as investment into the Brazilian economy reached 4.61 percent of GDP last month, the central bank said.