UPDATE 2-Brazil August current account gap narrows vs yr ago

* Brazil's current account narrows to $821 mln in August

* Current account for August smaller than expected

* Cenbank sees sharp increase in 2010 current account gap (Recasts, adds byline, details and quotes)

By Isabel Versiani

BRASILIA, Sept 24 (Reuters) - Brazil's current account deficit narrowed in August from a year ago, helped by an unexpected widening of the trade surplus and as foreign companies sent slightly less money abroad than a year ago, the central bank said on Thursday.

Brazil posted an $821 million current account deficit BRCURA=ECI in August, narrowing from $1.08 billion in the same month in 2008, the central bank said. It was expected to widen slightly in September to $900 million, the central bank said.

The deficit was also smaller than the $1.0 billion deficit expected for the month, according to a median forecast of 20 economists surveyed by Reuters. Estimates ranged from a deficit of $500 million to a deficit of $1.9 billion.

Despite this, Brazil's central bank forecast the current account deficit would increase to $29 billion in 2010 as the economy grew, 61 percent wider than the $18 billion deficit expected for 2009 in its revised forecast. The previous estimate in June was $15 billion.

But this could be financed by foreign direct investment, which was expected to jump 52 percent in 2010 from 2009.

"They are contemplating a much stronger level of activity," said Altamir Lopes, head of the economics department at the central bank, adding that imports and services costs were likely to increase.

Brazil's economy emerged from recession in the second quarter of this year with 1.9 percent growth.

"But the expectations for financing of the deficit also rose," Lopes said.

The central bank kept its forecast for foreign direct investment in 2009 at $25 billion but expected that to jump 52 percent in 2010 to $38 billion. FDI fell from a year ago in August to $1.91 billion from $4.64 billion in August 2008.

AUGUST NUMBERS

The narrower current account deficit came as the trade surplus widened unexpectedly in August, with imports slumping at double the pace of exports.

The trade surplus rose to $3.074 billion in August from $2.93 billion in July. Economists polled by Reuters had expected that surplus to narrow.

Meanwhile, foreign companies sent $1.9 billion abroad compared to $1.93 billion in August 2008.

The central bank revised its expectations for the trade surplus this year to $27 billion from $20 billion.

The current account balance of payments is a country's widest measure of its foreign transactions of goods and services. It is seen as a gauge of a country's reliance on foreign capital.

In the 12 months through August, the deficit was equal to 1.34 percent of gross domestic product, a touch lower than the deficit of 1.35 percent of GDP posted for the 12 months through July. (Writing by Ana Nicolaci da Costa; Editing by Andrea Ricci)