Brazil’s current account balance improvement to continue in H2

Due to a sharper contraction in imports, Brazil's H1 trade balance improved to USD2.2bn compared with a deficit of -USD2.5bn in H1 14. 

Societe Generale forecasts the current account balance (CAB) in June will be at -USD2,238m, and likely improved to -USD38.1bn in H1 15 from -USD50.1bn in H1 14 (-USD54.8bn in H2 14). Clearly, the growth weakness at home seems to be helping on the external front. 

According to Societe Generale, "The recent pace of improvement likely to continue in H2, we are heading for a nearly 28% correction in the CAB this year in dollar terms. However, given the possibility that the BRL depreciation this year could average closer to 30% or more (see our BRL forecast here), we could see a small improvement in the CAB/GDP ratio than would probably otherwise have been the case. We could  see further improvement in the ratio if dollar GDP growth surprises on the upside."