Reuters logo
UPDATE 1-Investment inflows into Brazil soar, external gap meets forecasts
January 26, 2016 / 1:39 PM / 2 years ago

UPDATE 1-Investment inflows into Brazil soar, external gap meets forecasts

(Adds year-end figures and context)

BRASILIA, Jan 26 (Reuters) - Foreign direct investment into Brazil came in December at more than twice the amount estimated by analysts, as a weakening currency and declining asset prices triggered a jump in merger and acquisition activity at the end of last year.

FDI, as the indicator is known, rose to $15.211 billion last month, the central bank said in a report on Tuesday. The number topped a median estimate of $6.5 billion in a Reuters poll of economists.

The current account, the most comprehensive gauge of trade flows, posted a deficit of $2.46 billion in December, slightly below the $2.5 billion that economists estimated in the poll. Last year, the shortfall totaled $58.942 billion.

A sinking economy mired in its worst recession since at least 1990 has hit demand for imports while a weaker currency helped local exporters sell more abroad.

That combination has reduced the current account gap to its smallest since at least 2010, at $58.942 billion last year versus $104.181 billion in 2014.

Foreign direct investment also fell in the year but by 29 percent to $75.075 billion.

In the 12 months through December, the deficit was equivalent to 3.32 percent of Brazil’s gross domestic product, down from 3.72 percent of GDP the previous month.

The improving external accounts are good news for President Dilma Rousseff, who is struggling to the pull the economy out recession while she also battles impeachment proceedings against her in Congress. (Reporting by Alonso Soto and Marcela Ayres; Writing by Guillermo Parra-Bernal and Alonso Soto; Editing by Bill Trott)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below