March 22, 2013 / 2:55 PM / in 5 years

UPDATE 2-Brazil February current account gap swells from year ago

* Record trade deficit in January hits current account

* Foreign direct investment falls short of covering gap

* Central banks revises 2013 deficit up to $67 billion

By Alonso Soto

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

The bank revised up its forecast for the current account deficit in 2013 to $67 billion from $65 billion previously while maintaining is 2013 foreign direct investment forecast at $65 billion.

If the central bank’s forecasts prove correct, 2013 would be the first year since 2001 that FDI will not cover the Brazil’s current account deficit.

Brazil posted a current account gap of $6.6 billion in February, compared with $1.7 billion in the 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 w record high of $11.37 billion. The 12-month current account deficit equaled 2.79 percent of GDP through February, the central bank said.

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.

In January and February FDI has fallen short of covering Brazil’s large gap in the current account, which encompasses trade, profit remittances, interest payments and 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 and 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.

Below are the central bank forecasts for Brazil’s balance of payments in 2013, billions of dollars:

previous new Current account deficit 65.0 67.0 FDI 65.0 65.0 Trade balance 17.0 15.0 Profit remittances 30.0 30.0

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