Sao Paulo, 08/26/2024 – The July external industry result, released a little while ago by the Central Bank, confirms the worsening trend in the country’s current account deficits, says Buysidebrazil partner and economist Andréa Damico. “The external deficit continues to deteriorate and we should continue with this worsening,” she reinforces.
The economist points out that there have been more robust negative balances in the services balance account, especially the “other services” item, pulled, among others, by the consumption of streaming and services related to recreation. Damico also pays attention to the deterioration in the primary income account, with stronger remittances of profits and dividends outside Brazil. “Domestic activity surprised positively this year, so we ended up seeing this move in remittances,” she details.
As disclosed by the BC, current transactions had a deficit of US$ 5.162 billion in July, more negative than the median of the Broadcast Projections , of US$ 4.350 billion. There was, at this reading, a deficit of US$ 4.751 billion in the services account and US$ 7.829 billion in the primary income account.
The goods trade balance registered a surplus of US$ 7.070 billion in the month, according to the BC. Damico warns, however, that the trend is for more timid trade balances in the coming months, mainly as an effect of a drop in the international price of the main commodities.
Foreign Exchange
In this outlook, Damico estimates that the foreign exchange should fluctuate around R$ 5.50 in the coming weeks and end the year at around this level. She cites that there is expectation of an improvement in the global outlook from the beginning of interest rate cuts in the United States in September, at the same time that lower commodity prices tend to devalue the real.
“In addition, we have a more negative seasonality in this financial flow going forward, especially in the month of December, when international travel bills rise,” adds the economist.
Source: Broadcast
