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
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