By Jamie McGeever
BRASILIA (Reuters) – Brazil’s current account deficit in the year to January as a share of the overall economy shrank to its smallest in 13 years, official figures showed on Wednesday, thanks mainly to a decline in the primary income and services deficits.
The current account deficit of 0.65% of gross domestic product in the 12 months to January was down from 0.87% the previous month and the smallest since February, 2008, central bank figures showed.
Brazil posted a current account deficit of $7.25 billion in January, the second deficit in a row and slightly less than the $7.75 billion shortfall forecast in a Reuters poll of economists.
It was significantly smaller than the $10.3 billion deficit registered in the same month last year, as the trade deficit shrank to $1.9 billion from $2.5 billion. The services deficit shrank almost 60% to $1.0 billion, the smallest in 12 years.
Foreign direct investment in January totaled $1.8 billion, the central bank said, less than the $2.8 billion forecast in a Reuters poll.
Based on partial data so far for February, the central bank expects FDI to total $6.5 billion this month and a current account deficit of $2.3 billion this month.
Net portfolio investments into Brazil totaled $6.2 billion in January, the eighth consecutive month of inflows, the central bank said. Of that, $4.7 billion went into stocks, and $1.5 billion in debt securities.
(Reporting by Jamie McGeever, editing by Louise Heavens and Chizu Nomiyama)
