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By Jamie McGeever
BRASILIA, June 24 (Reuters) - Brazil’s current account swung back into surplus in May from a deficit the prior month, the central bank reported on Monday, while foreign capital flows into the country continued their strong start to 2019 and rose to the highest in years.
Foreign direct investment (FDI) into Brazil totaled $7.1 billion in May, slightly below the median estimate in a Reuters poll of $7.5 billion.
That brought the total in the first five months of the year to $35.1 billion, the central bank said, 30.7% higher than a year earlier. In the 12 months to May net FDI inflows totaled $96.6 billion, equivalent to 5.19% of GDP. By both measures, that is the highest in recent years.
Brazil is still expected to attract strong capital inflows from abroad this year, even though the economy is struggling and the government’s plans to overhaul the country’s pension system have hit legislative quicksand.
These flows should be more than enough to plug the current account deficit, which the central bank estimates will be just over $30 billion this year.
In May, the balance swung to a surplus of $662 million surplus although that was lower than the $725 million median forecast in a Reuters poll of economists and 26.4% smaller than the $900 million surplus posted in May last year.
Exports of goods in May totaled $21.2 billion and imports reached $15.5 billion, giving a goods surplus of $5.7 billion. Compared with the same month last year, exports jumped 10.5% and imports were 13.9% higher.
As a share of gross domestic product, Brazil’s current account deficit in the 12 months to May widened slightly to 0.75% from 0.73% in April, the central bank said. It has stuck around these levels all year, having fallen from around 0.90% of GDP in August last year. (Reporting by Jamie McGeever Editing by Chizu Nomiyama and Steve Orlofsky)