External accounts show a deficit of US$4.6 billion in March

The result of Brazil’s balance of payments in March 2024 — that is, the record of all economic and financial operations with other countries — brought good and bad news for the country, assesses Paulo Rocha, a specialist in foreign trade. If, on the one hand, external accounts closed the month with a negative balance of US$4.6 billion, on the other, foreign investment here was the highest for the month of March since 2012.

“Direct investments in the country have increased, which is good news”, assesses Paulo Rocha. According to the Central Bank, foreign contributions to Brazil totaled US$9.6 billion, compared to US$7.3 billion in March last year.

The trade balance of goods was also in surplus, that is, Brazil sold more raw materials and products than it purchased. Exports totaled US$28.5 billion, while imports totaled US$23.4 billion, a balance of US$5.1 billion. In March 2023, however, the balance was US$9.3 billion.

Exports fell 14% compared to the same period last year, a drop that Rocha considers decisive for the result of the trade balance and, consequently, the balance of payments.

“The trade balance was in surplus, but had a much lower performance than in the same month last year and this mainly represents a drop in export revenues as a result of climate events.”

It is worth remembering that the trade balance of goods is just one of the components of a country’s balance of payments, which also includes the balance of services, such as transport; and income, such as profits and dividends.

Services have a deficit of US$3.7 billion

The services account closed March with a deficit of US$3.7 billion, while the primary income account had a negative balance of US$6 billion. Added to the balance of trade in goods, they contributed to the overall drop, says Rocha. But that’s no reason to worry, he says.

“The fact that, in March, balance of payments transactions registered a deficitwhile in the same month last year the result had been swon represents a greater outflow of currency, but does not have a significant negative impact on the country’s accounts”, he says.

Over the 12-month period, Brazilian external accounts recorded a deficit of US$32.6 billion, equivalent to 1.23% of the Gross Domestic Product (GDP).

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