Improvement in Brazil's current account balance to GDP ratio unexpected

At -USD6,901m, the current account balance of Brazil (CAB) came in better than the estimate in April. Moreover, the releases for the first four months this year show the CAB improving to -USD32.5bn year-to-date from -USD37.1bn over the same period last year. At this rate, and assuming no decline in nominal dollar GDP, the CAB should improve to -3.9% of GDP this year from an over 30-year low of -4.5%, notes Societe Generale. However, given the sharp depreciation of the real and the possibility that GDP could shrink substantially in dollar terms, it will make surprise if the CAB/GDP ratio improves at all this year.