Brazil posts current account deficit in July

Aug 23, 2007 - Brazil posted a current account deficit of $717 million in July compared with a surplus of $3.05 billion in the same month a year ago, the central bank said on Thursday.

The result was weaker than the $100 million surplus median forecast of 16 economists surveyed by Reuters. The estimates ranged from a deficit of $750 million to a surplus of $785 million.

In June, the current account -- the widest measure of a country's trade in goods and services -- was a surplus of $696 million.

In the 12 months through July, Brazil posted a current account surplus equal to 0.99 percent of gross domestic product compared with 1.33 percent through June.

The current account balance tracks a country's net flow of external transactions, including foreign trade, interest payments and services such as tourism. It is used to gauge a country's dependence on foreign capital.

Foreign investment, which falls under the capital account of the balance of payments, has surged as falling interest rates and accelerating economic growth prompt companies to invest in plants and machinery to produce more goods.

Foreign direct investment in Brazil, Latin America's largest economy, jumped to $3.58 billion in July from $1.59 billion in the same month a year ago. In June FDI had surged to a monthly record of $10.32 billion.