Recovery

According to a study by IPEA, the deficit in the accounts should end the year at around 1% of GDP, below the country's historical average, which is 1.8%

Brazil should close 2016 with a deficit in the external accounts around 1% of gross domestic product (GDP), which is the sum of all wealth produced by Brazil. The result, which appears in a survey released on Thursday (3) by the Institute of Applied Economic Research (IPEA), is the best of recent years, below the historical average of the country, which is 1.8% of GDP.

According to the Charter of Conjuntura document produced by the IPEA that evaluates economic data released by the Brazilian Institute of Geography and Statistics (IBGE), Brazilian external accounts "remain in an adjustment path, with significant reduction of the current account deficit."

In the year to September, the deficit stood at $ 13.6 billion, reduced by more than 70% compared to the same period 2015 number (US $ 49.214 billion). 

According to Ribeiro, the fall of the deficit can be explained mainly by the increase in the trade surplus. "Indeed, the Brazilian trade balance has recorded since the end of 2015, trade surpluses quite robust, in the order of $ 3 billion to $ 5 billion a month, and from January to October, the surplus reached US $ 38.5 billion, three times more than the number of the first ten months of 2015, "says survey excerpt

The fall "extraordinary" of imports, according to the Ipea, is one of the factors to improve the trade balance. "The latest seasonally adjusted data suggest, however, that there is some stabilization of imports and a further fall in exports, leading to a reduction of trade balances. Thus, in annualized terms, seasonally adjusted balance reached a historic peak of about $ 60 billion in May, retreating in recent months to values ​​closer to $ 40 billion, "ponders Ribeiro in the survey.

Capital flow

According to the Charter of Conjuntura, the country's net capital flows were reduced by 68.8% from Janeira to September compared to the same period of 2015, the lowest for the period in the last ten years.

At the other extreme, according to the Ipea, the negative balance of US $ 11.4 billion of portfolio investments, was mainly due to the net return of $ 15.6 billion of investments in securities traded in foreign markets.

Source: Agency Brazil