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UPDATE 1-Brazil current account gap widens in February to $6.6 bln
March 22, 2013 / 2:00 PM / 5 years ago

UPDATE 1-Brazil current account gap widens in February to $6.6 bln

BRASILIA, March 22 (Reuters) - Brazil’s current account deficit widened in February from a year earlier as imports outpaced exports for the second straight month, central bank data showed on Friday.

Brazil posted a current account gap of $6.6 billion in February, well above the $1.7 billion deficit registered that same month last year and higher than the median forecast of $6.1 billion by 20 analysts surveyed by Reuters. Their forecasts for the deficit ranged from $3 billion to $7.1 billion.

Brazil’s current account deficit in January climbed to a new record high of $11.37 billion, the central bank said last month.

Foreign direct investment, which is part of the capital account of the balance of payments, was $3.8 billion in February, up from a previously reported $3.7 billion in January and more than the expected $3.5 billion.

The February FDI fell short of covering the large gap in the current account, which encompassing trade, profit remittances, interest payments and other items like tourism.

Brazil, a major soybean and iron ore produce. posted a larger-than-expected trade deficit of $1.276 billion in February as imports surged to a record high for the month. It had posted a deficit of $4 billion in January, the largest on record.

Government officials have said the large deficits are due to accounting changes which tallied billions of dollars of fuel imports from 2012 in this year’s balance and seasonal factors.

However, some say the country’s trade balance could remain under pressure this year as the domestic currency has appreciated so far this year nd robust consumption should keep demand for imports strong in the South American country.

“Based on our out-of-consensus forecast of a stronger economy and stronger real in 2013, we believe import values could surprise on the upside, further reducing the trade balance,” analysts with Nomura Securities said in a research note published on Thursday.

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