By Jamie McGeever
BRASILIA, Sept 23 (Reuters) - Brazil’s current account deficit widened in August, central bank figures showed on Monday, by some measures to its widest in over two years thanks to increased net outflows from investment income and corporate profit repatriation.
The broadest measure of the gap between what Brazil sells to the rest of the world and what it imports, including capital flows, reached $33.85 billion in the 12 months to August, the equivalent to 1.84% of gross domestic product.
That is the widest deficit since the 2.11% registered in March 2016, when Brazil was in the midst of one of the deepest recessions in its history. In July this year, the equivalent deficit was 1.70%, and in January it was 1.24%.
The central bank said there was a revision to the methodology of how certain cross-border flows are calculated, which adjusted previous months’ data. For example, the 12-month deficit through July was revised up to $31.3 billion, or 1.7% of GDP, from $24.4 billion and 0.95% of GDP as previously reported.
In the month of August itself, Brazil’s current account deficit was $4.27 billion, slightly wider than the $3.96 billion shortfall forecast in a Reuters poll of economists and more than double the $1.75 billion deficit in the same month last year.
The main driver of the shortfall last month was a $3.43 billion net outflow of profits and dividends, compared with just $464 million a year earlier, the central bank said.
The deficit, however, was once again more than adequately funded by foreign direct investment (FDI) inflows, which totaled $9.47 billion in August, more than the Reuters poll estimate of $6.0 billion.
In the 12 months to August, FDI has totaled $72 billion, some 3.91% of GDP, easily covering the $33.85 billion current account gap, central bank figures show. FDI in September is expected to total a further $4 billion, central bank director Fernando Rocha said on Monday.
The revised methodology also affected previous months’ FDI figures, the central bank said. The 12-month rolling total through July was revised down to $72.2 billion, or 3.9% of GDP, from $94.9 billion and 5.00% of GDP. (Reporting by Jamie McGeever; Editing by Kevin Liffey and Lisa Shumaker)