May 27, 2019 / 3:13 PM / a year ago

UPDATE 1-Brazil posts surprise current account deficit in April, FDI floods in

(Adds detail, context)

By Jamie McGeever

BRASILIA, May 27 (Reuters) - Brazil posted a surprise current account deficit in April, central bank data showed on Monday, although as a share of national economic output Brazil’s balance of payments shortfall with the rest of the world is showing signs of stabilizing.

International capital continued to flow into Brazil too, with foreign direct investment exceeding forecasts and, measured as a share of the economy over a cumulative 12-month basis, hitting its highest level since 2001.

The $62 million current account deficit was well short of the median forecast in a Reuters poll of economists of a $450 million surplus, as the services deficit widened 11.9% to $3 billion and other services-related income fell 18% to $1.1 billion.

But in the year to April, the deficit was little changed at $13.7 billion and held steady at 0.73% of gross domestic product, the central bank said.

According to the latest central bank ‘FOCUS’ survey of around 100 financial institutions published on Monday, investors expect Brazil will post a current account deficit of $25 billion this year. An anticipated trade surplus of just over $50 billion will be wiped out by a shortfall in financial payments.

The balance of payments deficit continues to be funded by strong capital inflows, central bank data showed. FDI in April nudged $7 billion, up from $6.8 billion in March and higher than the $5.8 billion predicted in a Reuters poll of economists.

The central bank estimated that FDI in May will rise even further, up to $7.5 billion.

In the year to April, FDI totaled $92.5 billion, equivalent to 4.96% of GDP, the highest share since May 2001, the central bank said.

Portfolio flows in April posted a net $547 million outflow. (Reporting by Marcela Ayres and Jamie McGeever; Editing by Jeffrey Benkoe and Andrea Ricci)

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