(Recasts with details, background, 2015 estimates)
BRASILIA, Jan 23 (Reuters) - Brazil recorded its widest current account deficit ever in 2014 as it posted a trade deficit due to a sharp fall in the price of key exports and a sluggish global economy.
The country posted a current account deficit of $10.317 billion in December, central bank data showed on Friday, above market expectations for a $9.7 billion deficit.
In 2014, the commodities powerhouse had a deficit of $90.948 billion, well above the previous record deficit of $81.1 billion posted in 2013.
Investors are worried about the health of the once-thriving Brazilian economy due to the rising external and fiscal deficits, a challenge to President Dilma Rousseff’s efforts to regain market’s trust.
The widening current account gap is largely explained by the drop in the value of crucial exports like iron ore and soybeans that pushed the trade balance into a deficit for the first time in 14 years in 2014.
A deteriorating trade balance helped weaken the local currency, the Brazilian real, as fewer U.S. dollars entered the economy. The weaker real led to additional inflationary pressures last year as imports become more costly.
In all of 2014, Brazil’s current account deficit was equivalent to 4.17 percent of gross domestic product, the highest since 2001.
Last year the deficit was equivalent to 3.62 percent of GDP.
Foreign direct investment (FDI) into Brazil was not enough to cover the current account gap for the second year in a row. In all of 2014, Brazil had FDI of $62.495 billion.
In December, the country saw FDI inflows of $6.650 billion, slightly above market expectations for $6.5 billion.
The central bank forecasts for the current account gap and FDI in 2015 are $83.5 billion and $65 billion, respectively. (Reporting by Silvio Cascione and Luciana Otoni; Writing by Alonso Soto; Editing by Jeffrey Benkoe)