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Brazil's External Accounts In October: Wider Gap, Strong Capital And New Crypto Rules
(MENAFN- The Rio Times) Brazil's latest external accounts tell a story that is easy to miss. In October the country spent 5.1 billion dollars more abroad than it earned; over 12 months the gap reached 76.7 billion dollars, about 3.5% of GDP.
Look closer and the picture is more nuanced. Brazil is not bleeding cash because it cannot sell; its trade in goods is a bright spot. Exports reached 32.1 billion dollars in October, imports slipped to 25.9 billion, and the trade surplus almost doubled from a year earlier to 6.2 billion.
Commodities such as soy, iron ore and oil still attract buyers. The leak is elsewhere. Brazilians are travelling and spending heavily abroad, while relatively few foreigners come the other way. The travel account alone showed a 1.3-billion-dollar deficit in October.
Add growing payments for technology and intellectual property – software licences, cloud services, brands – and the services bill stays deep in the red. In a world run on foreign code and platforms, Brazil pays rent to overseas tech owners every month.
Then comes the quiet, heavy bill of capital. Interest on external debt and profits and dividends sent home by multinational companies produced a 7.4-billion-dollar deficit in October.
That is the price of past investment and borrowing, and it remains manageable only as long as investors believe the rules of the game will not be rewritten overnight. For now, they seem comfortable.
Brazil Bolsters Credibility with Strong FDI and Clearer Rules
Foreign direct investment reached almost 11 billion dollars in October and 80 billion over 12 months, more than enough to cover the current-account gap. International reserves, at 357 billion dollars, give the Central Bank ammunition against shocks.
Even the footnote matters. The Central Bank has updated how it counts crypto-assets, separating Bitcoin-style tokens from issuer-backed coins, following new IMF guidance. It is a small, technical step, but it signals that Brazil wants to be treated as a serious player that follows global standards.
For expats and foreign readers, the message is simple: Brazil lives on foreign savings, but it is trying to do so the grown-up way – through trade, real investment and clearer rules, not through shortcuts and magical thinking.
Look closer and the picture is more nuanced. Brazil is not bleeding cash because it cannot sell; its trade in goods is a bright spot. Exports reached 32.1 billion dollars in October, imports slipped to 25.9 billion, and the trade surplus almost doubled from a year earlier to 6.2 billion.
Commodities such as soy, iron ore and oil still attract buyers. The leak is elsewhere. Brazilians are travelling and spending heavily abroad, while relatively few foreigners come the other way. The travel account alone showed a 1.3-billion-dollar deficit in October.
Add growing payments for technology and intellectual property – software licences, cloud services, brands – and the services bill stays deep in the red. In a world run on foreign code and platforms, Brazil pays rent to overseas tech owners every month.
Then comes the quiet, heavy bill of capital. Interest on external debt and profits and dividends sent home by multinational companies produced a 7.4-billion-dollar deficit in October.
That is the price of past investment and borrowing, and it remains manageable only as long as investors believe the rules of the game will not be rewritten overnight. For now, they seem comfortable.
Brazil Bolsters Credibility with Strong FDI and Clearer Rules
Foreign direct investment reached almost 11 billion dollars in October and 80 billion over 12 months, more than enough to cover the current-account gap. International reserves, at 357 billion dollars, give the Central Bank ammunition against shocks.
Even the footnote matters. The Central Bank has updated how it counts crypto-assets, separating Bitcoin-style tokens from issuer-backed coins, following new IMF guidance. It is a small, technical step, but it signals that Brazil wants to be treated as a serious player that follows global standards.
For expats and foreign readers, the message is simple: Brazil lives on foreign savings, but it is trying to do so the grown-up way – through trade, real investment and clearer rules, not through shortcuts and magical thinking.
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