Brazil’s current account balance likely to have improved further in September

Brazil’s external balances are expected to flatten soon, given that imports of the country are stabilizing. The nation’s current account balance rebounded last year to a deficit of USD 58.9 billion from 2014’s deficit of USD 104.2 billion or to -3.1 percent of the GDP in 2015 from -4.3 percent of the GDP in 2014.

Current accounts of Brazil have continued to rebound in 2016 as well; however, with exports continuing to face external demand constraints and imports seeming to stabilize, the phase of rebounding trade and current account balance might be over sooner than anticipated, said Societe Generale in a research note.

Brazil’s current account balance is expected to have improved in September by USD 1.42 billion year-on-year to a deficit of USD 1.59 billion. Thus the year-to-date current account balance is likely to improve to a deficit of USD 14.7 billion from USD 42.2 billion for the same period last year.

“We currently forecast the CAB/GDP ratio at -1.3 percent for 2016”, added Societe Generale.