Economic Analysis - Election Will Drive Risk Of Capital Outflows - NOV 2017

BMI View : Brazil's external accounts will benefit from strong export growth and buoyant capital inflows over the coming quarters, supporting a historically narrow current account deficit. However, a volatile political environment ahead of the 2018 elections will raise risks to capital inflows.

  • We maintain our view that Brazil's current account deficit will narrow in 2017 on strong export growth and weaker imports, although it will maintain a shortfall over the foreseeable future.

  • Capital inflows will most likely continue to cover external financing needs, boosting reserve accumulation and the country's sovereign credentials.

  • Export Growth Drives Narrower Shortfall
    Brazil - Current Account
    f = BMI forecast; Source: BCB, BMI

    This article is part of our Brazil coverage. To access this article subscribe now or sign up for free trial