Brasília – Overseas spending by Brazilian travellers reached a new record in May. According to figures released by the Brazilian Central Bank (BC, in the Portuguese acronym) this Tuesday (24th), US$ 2.266 billion were spent last month, the highest amount ever for the period. In May 2013, expenditure reached US$ 2.221 billion.
Year-to-date through May, overseas spending by Brazilians amounted to US$ 10.484 billion, as against US$ 10.301 billion in the same period of 2013.
Spending by foreigners during trips to Brazil stood at US$ 531 million in May 2014, as against US$ 522 million in May last year. Year-to-date through May, foreigners spent US$ 2.849 billion in the country, as against US$ 3.027 billion in the same period of 2013.
The resulting travel account deficit was US$ 7.635 billion year-to-date through May and US$ 1.735 billion in May alone. The BC informed that it has revised its international travel account deficit projection for this year down from US$ 18.5 billion to US$ 18 billion.
As for Brazil’s current account deficit, the BC has kept its deficit projection for this year at US$ 80 billion. The deficit is expected to amount to 3.47% of the Gross Domestic Product (GDP); the prior forecast was 3.59%. The bank revises its projections on a quarterly basis.
The BC’s trade balance surplus (exports exceeding imports) forecast for this year has dropped from US$ 8 billion to US$ 5 billion. The services account deficit forecast (international travel, transportation, equipment rental, insurance and others) has been lowered from US$ 51.2 billion to US$ 47.6 billion.
Regarding the income account (profit and dividend remittances, payment of interest and wages), the US$ 39.9 billion deficit estimate has been maintained.
The net inflow of unilateral current transfers (US dollar donations and remittances to or from other countries, with no counterpart in services or goods) has been revised down from US$ 3.1 billion to US$ 2.5 billion.
Deficit
Year-to-date through May, the current transaction deficit was US$ 40.074 billion, as against US$ 39.295 billion in the same period of 2013. The sum is equivalent to 4.26% of the GDP.
Whenever the country incurs a current account deficit, the result has to be financed either via foreign direct investment (FDI) or via loans from foreign countries. FDI is considered the best mode of financing due to its long-term character.
However, the BC does not expect FDI to completely offset the deficit this year. The bank believes FDI should reach US$ 63 billion this year, same as in the prior estimate. FDI is now expected to amount to 2.73% of the GDP, as against 2.83% in the previous forecast. Year-to-date through May, FDI in Brazil stood at US$ 25.34 billion.
The BC expects foreign investment in shares traded in Brazil and abroad to amount to US$ 12 billion, as against US$ 5 billion in the prior forecast. Investment in bonds traded in Brazil should be US$ 18 billion; the previous estimate was US$ 15 billion.
*Translated by Gabriel Pomerancblum
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