Brazil’s current account deficit widened to $8.11 billion in July 2026, exceeding the $6.6 billion market forecast and marking the largest July shortfall since 2019. The goods trade surplus fell to $6.2 billion as imports rose 8.1%, faster than the 5.7% increase in exports, with fuel and fertilizers contributing to import growth. The services deficit expanded to $5.3 billion, partly because of higher transportation, travel and other overseas spending. The primary income deficit rose to $9.4 billion on higher net expenses for profits and dividends, while the secondary income surplus narrowed to $404 million. Foreign direct investment fell to $7.46 billion from $8.4 billion a year earlier and below the $7.92 billion forecast, but continued to comfortably finance the external gap. On a rolling 12-month basis, FDI declined to 3.50% of gross domestic product while the current account deficit rose to 2.49% of GDP. The wider deficit may pressure the Brazilian real and raise imported inflation through exchange-rate pass-through, although a flexible exchange rate, substantial international reserves and relatively robust FDI reduce immediate financing risks. The Central Bank of Brazil has said the current account remains sustainable in the medium term, while economists view the deterioration as a sign of the need for structural reforms to strengthen domestic savings and export competitiveness.