External accounts must have a deficit of US$ 2 billion

The information is from Inflation Reportquarterly publication of BC, released this Thursday (29).

The increase in the projected deficit comes mainly from the reduction in the trade balance, from R$ 62 billion to R$ 54 billion, with a drop in the value of exports, from US$ 338 billion to US$ 335 billion, and an increase in the value of imports from US$ 277 billion to US$ 281 billion.

“The projection of exported value for the year reflects a sharper drop in implicit prices than previously expected, following the trajectory of commodity prices in international markets. This reduction in relation to 2022, already foreseen in the previous report, should occur in greater intensity, mainly in the case of basic products, such as soy and oil”, explained the BC.

On the other hand, there will be an increase in the volume of exports due to the record harvest of grains expected for the year, which should only partially offset the negative price revision. The projection also incorporates a higher-than-expected export volume of manufactured and semi-manufactured products.

For imports, less sharp declines in prices and volume are expected. According to the BC, the revision reflects the most recent data, which show a slight recovery in imports in the main categories.

The expected deficit in the services account was maintained at US$36 billion, below the one registered in 2022 (US$40 billion). “The perspective of reduction in relation to the previous year reflects lower expenses with transport, resulting from the gradual normalization in the costs of air and waterway modes, in addition to the lower volume of imported goods. On the other hand, travel expenses should exceed those observed last year, already at a level more compatible with that observed before the pandemic ”, says the report.

For the primary income account, the deficit projection was revised upwards slightly, with higher net outlays on profits and dividends. “These expenses remain at a high level, although below what was observed in 2022, reflecting favorable results of companies that have non-resident participation in their capital in the first quarter of 2023, when economic activity surprised, especially in less cyclical sectors”, he explained the BC.

Thus, the primary income deficit forecast increased from US$ 61 billion to US$ 63 billion.

Foreign investment

In the financial account, projections of net inflow in direct investments in the country (IDP) were maintained, in an amount higher than the expected deficit for current transactions and approaching the average observed in the decade before the pandemic. The estimated IDP in 2023 was US$ 75 billion.

When the country registers a negative current account balance, it needs to cover the deficit with investments or loans abroad. The best form of financing the negative balance is the IDP, because the resources are invested in the productive sector and tend to be long-term investments.

For portfolio investments, the projection was revised from a net outflow of R$ 5 billion to neutrality.