FDI reached $66 billion over the past 12 months, representing 2.95% of Gross Domestic Product (GDP). These figures were released Monday by the Central Bank, which projects FDI to be $70 billion for 2024.

At this accumulated FDI level, the figure remains above the current account deficit, which stands at $40.1 billion (1.79% of GDP) over 12 months. “Overall, the country’s external deficit remains low and continues to be fully financed by the net inflow of long-term capital in the form of direct investment,” said Renato Baldini, deputy head of the Central Bank’s statistics department.

The FDI calculation includes funds for equity participation and direct loans provided by multinational company headquarters to their subsidiaries in Brazil and vice versa. The return of Brazilian investment abroad is also included in these statistics.

Alberto Ramos, head of Latin American economics research at Goldman Sachs, noted in a report that May’s FDI was surprisingly low but emphasized that the external accounts remain solid, “with a moderate current account deficit anchored by a robust trade surplus and FDI capital and fixed income inflows.”

In May, the current account balance posted a deficit of $3.4 billion. Deficits in primary income ($5.2 billion) and the services account ($4.5 billion) contributed to this outcome. However, a $6.4 billion surplus in the goods trade balance mitigated the period’s deficit.

Year-to-date, the current account deficit stood at $21.1 billion, compared to $11.8 billion in 2023. The trade balance recorded a surplus of $25 billion versus $29.1 billion during the same period last year. Meanwhile, the services account posted a deficit of $19.2 billion, up from $14 billion, and the primary income account remained stable at around $27.2 billion.

Nicolas Borsoi, chief economist at Nova Futura Investimentos, emphasized that the 12-month deficit has worsened mainly due to base effects, noting “extraordinary results” early last year from strong trade surpluses. “Apart from this effect, the current account balance has behaved as expected,” he said.

Next month, the trade balance and current account results will undergo an extraordinary review. According to the Central Bank, the International Monetary Fund has changed the methodological treatment of crypto assets, which will no longer be considered goods but as non-produced non-financial assets.

Mr. Baldini explained that the review will exclude the import of crypto assets from the current account, which includes the trade balance, and will incorporate them into the capital account. “As a result, the impacts can be significant,” said Mr. Baldini.

He provided an example for 2024: from January to May, net imports of crypto assets amounted to $7.3 billion. Excluding these from the current account would reduce the accumulated deficit from $21.1 billion to $13.8 billion.