Brazil Posts Biggest Current Account Deficit for May in Eight Years

Brazil posted a current account deficit of $3.5 billion in May, the worst result for the month in eight years, amid trade balance weakening, central bank figures showed on Friday, Reuters reported. A strong commodities producer, Brazil has seen its exports grow, but imports have increased at a faster pace, driven by higher prices for products such as fuel and fertilizers. In May, the trade balance surplus was $3.4 billion, down 53.3% over the same month last year. The factor payments deficit also rose by $1.4 billion in the month, while the services deficit rose by $743 million, the central bank said. Overall, this was the worst current account figure for May since 2014, when the deficit was $6.7 billion. On the other hand, foreign direct investment in May totaled $4.5 billion, more than doubling from $2.2 billion a year earlier. According to the central bank, investors made a net redemption of $3.9 billion from Brazilian markets in May, including $3.2 billion outflows in stocks and $702 million in bonds. Read more.