By Marcela Ayres
BRASILIA (Reuters) -Brazil's foreign direct investment inflows through October have already surpassed last year's total, central bank data showed on Tuesday, as the government expects FDI
to reach a record high this year.
The improvement in FDI, considered a higher-quality form of financing because it reflects long-term investment in productive activity, should help offset a worsening current account balance in Latin America's largest economy.
Year-to-date FDI reached $74.257 billion after a higher-than-expected inflow in October, the central bank said, up 8.8% from a year earlier and above the $74.091 billion recorded in all of 2024.
The country drew $10.937 billion in foreign direct investments last month, while economists polled by Reuters expected $6.304 billion.
Vice President Geraldo Alckmin said on Monday that Brazil was on track to set an FDI record this year. The country's highest annual inflow so far was in 2011, at $102.427 billion.
CURRENT ACCOUNT DEFICIT
On the other hand, Brazil posted a $5.121 billion current account deficit in October, wider than the $4.8 billion expected in the Reuters poll. The year-to-date shortfall hit $62.072 billion, a 20.5% year-on-year increase.
The deteriorating scenario stems mainly from a weaker trade surplus, as imports have grown faster than exports amid resilient economic activity despite restrictive interest rates aimed at taming inflation.
Over the 12 months through October, the current account deficit stood at 3.48% of gross domestic product (GDP), but was fully covered by FDI at 3.63% of GDP - something that had not been seen since January.
(Reporting by Marcela AyresEditing by Gabriel Araujo and Frances Kerry)
