Current account deficit jumps to $5.18 billion in June

Brazil had a current account deficit of $5.18 billion in June, according to the Central Bank. That was the worst result for the month of June since 1947. And the deficit for the first half was $23.76 billion, which is almost as much as the current account deficit for all of 2009 ($24.3 billion).

In order to balance the current account under present circumstances, Brazil has to depend on foreign investment. For the first half, that worked. But in June, direct foreign investment covered only 70% of the deficit (the Central Bank forecast was for $1.5 billion, but only $708 million came in). At the same time (June), multinationals in Brazil remitted abroad $4.15 billion, a record amount.

Finally, because of the higher level of economic activity, Brazil is paying more for services (up over 40%) and imports (up 45%).