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Brazil’s current account deficit drops to its lowest level in more than 13 years

By Jamie McGeever

BRASILIA, Jun 25 (.) – Brazil’s balance of payments improved again in May, according to central bank figures released on Friday, as the second consecutive monthly current account surplus cut the 12-month deficit to its lowest level in more than 13 years.

Latin America’s largest economy also attracted a combined $ 7.2 billion in foreign direct investment and cash flows to its domestic equity and bond markets in the month, the figures said.

The narrower current account gap and consistent recent fiscal flows have helped drive a rapid rise in the exchange rate, with the dollar now trading below the 5-real mark for the first time in a year.

Central bank figures showed Brazil posted a current account surplus of $ 3.8 billion in May, slightly less than the $ 4 billion surplus in the median forecast by analysts consulted for a . poll.

This was largely due to the $ 8.1 billion commercial goods surplus posted for the month. Exports jumped 54.4% compared to the same month last year, to a record of 27.2 billion dollars, surpassing a net increase of 31.9% in imports.

In the 12 months to May, the current account deficit totaled $ 8.4 billion, or 0.55% of Gross Domestic Product, the smallest proportion since February 2008. The deficit from a year ago reached almost 4% of GDP .

On Thursday, the central bank slightly raised its projection for the 2021 current account surplus to $ 3 billion from $ 2 billion. It would be the first annual current account surplus of the South American country since 2007.

(Reporting by Jamie McGeever. Edited in Spanish by Marion Giraldo)

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