Brazil’s Current Account Deficit Grows to USD69.4B
(MENAFN) Brazil's current account deficit widened sharply over the 12 months ending in May, reaching $69.4 billion, or 3.26% of the nation’s gross domestic product (GDP), according to figures released Wednesday by Brazil's Central Bank.
This marks a steep rise from the previous year, when the shortfall totaled $29.4 billion, equivalent to 1.30% of GDP—signaling a notable decline in the country's external financial balance.
The current account includes the trade of goods and services, as well as unilateral transfers such as remittances sent home by Brazilians abroad. A deficit in this account indicates the country is spending more on foreign transactions than it is earning, requiring financing from outside sources.
To cover the gap, Brazil relies on external funding, primarily in the form of foreign investments or international loans. Among these, domestic direct investment (DDI) is viewed as the most stable and long-term option.
In May 2025, net DDI inflows rose to $3.7 billion, an increase from $3 billion during the same month last year.
Brazil's international reserves also edged higher, standing at $341.5 billion at the close of May—an uptick of $670 million compared to April.
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