Rebounding Imports Will Widen Trade Gap In Brazil

  • Fitch Solutions expects Brazil's current account deficit will widen heading into 2021, as rebounding economic activity drives a sharp rise in imports.
  • The agency forecasts a current account deficit of 1.0% of GDP in 2020 and 1.9% in 2021, which is narrow relative to the average 2.5% deficit of 2018-19.
  • Capital inflows will most likely pick up as risk appetite returns to global markets, which should cover Brazil's external financing needs.

(Source: Fitch Solutions)