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article imageBrazil registers lowest budget deficit in 10 years

By AFP     Jan 26, 2018 in World

Brazil registered a budget deficit of $9.8 billion in 2017, its lowest in a decade and down from $23.5 billion the year before, the Brazilian Central Bank said on Friday.

The 2017 figure is equivalent to 0.48 percent of the Gross Domestic Product of Latin America's largest economy, which had been in recession for the previous two years. In 2016, it was the equivalent of 1.31 percent of GDP.

In December, the deficit was $4.327 billion, higher than the $3.8 billion the central bank had predicted.

The bank expects a deficit of current transactions $18.4 billion.

The last time Brazil had a current account surplus was in 2004 ($408 billion). By 2014, when it slipped into an economic slump, it was $104 billion in the red.

The current account includes the balance of commercial payments and services, including tourism, remittances from citizens living and working overseas and the transfer of business dividends.

The debit balance is supposed to be covered by investments or external lending.

Foreign direct investment (FDI) last year totaled $70.3 billion, against $78.248 billion in 2016. FDI in 2017 was enough to cover the budget deficit for the year.

The bank predicts FDI will reach $80 billion in 2018.

Conservative President Michel Temer, who took office in 2016 after the impeachment of his predecessor Dilma Rousseff on budgetary irregularities, sought this week at the World Economic Forum in Davos to portray his country in terms of normalization and recovery.

His government has launched a plan of adjustments that the markets had been calling for, but has so far failed to push through the pension reforms that business leaders are also demanding.

Brazil's international reserves totaled $373.9 billion in December, $7.1 billion less than in November.

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