UPDATE 1-Brazil posts widest account gap for March on record

Wed Apr 24, 2013 10:07am EDT

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* Current account gap in March doubles from a year ago

* FDI beats expectations, climbs to $5.739 bln

BRASILIA, April 24 (Reuters) - Brazil posted its worst current account deficit for March on record as shrinking exports and an increase in remittances of corporate profits and dividends hit the South American nation's external accounts.

The country posted a current account deficit of $6.873 billion in March, more than double the gap registered that same month a year ago, central bank data showed on Wednesday.

Brazil had been expected to post a deficit of $6 billion, according to the median forecast of 16 analysts in a Reuters survey. Its current account deficit in February was $6.625 billion, the central bank said last month.

Foreign direct investment in Latin America's largest economy was $5.739 billion in March, above market expectations of $4.2 billion.

Although FDI remains strong in the commodities powerhouse, it has not been enough to cover a widening current account deficit so far this year.

The central bank has forecast a current account deficit of $67 billion in 2013 and an FDI of $65 billion.

Brazil, a major soybean and iron ore producer, posted the smallest trade surplus for the month of March since 2001, largely due to a drop in oil exports and an increase in the purchase of petroleum derivatives.

Companies operating in Brazil repatriated $2.732 billion in profits and dividends to their headquarters abroad, well above the $1.965 billion repatriated a year ago.

In the 12 months through March, the current account deficit was equivalent to 2.93 percent of gross domestic product, the highest result since August 2002.

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