Brazil closed 2024 with a current account deficit amounting to 2.55% of gross domestic product (GDP), doubling from the previous year, according to the central bank. The deficit was mainly due to a decrease in the trade surplus, caused by a rise in imports and a slight decrease in exports. This was driven by the economy's strong performance, surpassing expectations consistently throughout the year.
The trade surplus decreased by 28.2% to $66.2 billion, with exports down by 1.2% and imports up by 8.8%. The services account deficit rose by 24.7% to $49.7 billion, further impacting the current account deficit.
On a positive note, the factor payments deficit reduced by 5.1%, influenced by lower profit and dividend outflows. In December, the current account deficit stood at $9 billion, with foreign direct investment (FDI) totaling $2.8 billion.
For the year, FDI amounted to $71.1 billion, equal to 3.24% of GDP, marking a 13.8% increase from the previous year. Additionally, portfolio investments in the domestic market showed net outflows of $4.3 billion in 2024, driven by outflows in equities and investment funds, partly offset by inflows in debt securities.
In December, portfolio investment outflows reached $12.6 billion due to heightened risk on Brazilian assets after the government's disappointing announcement on public debt trajectory. This was the second largest outflow recorded by the central bank since 1995, only surpassed by the outflow in March 2020 during the COVID-19 pandemic declaration.