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Brazil current account deficit narrows in January

Brazil posted a current account deficit of $2.75 billion in January, compared with a deficit of $4.03 billion in the same month in 2008, the central bank said.

The country was expected to post a deficit of $3.4 billion for the month, according to the median forecast of 20 analysts surveyed by Reuters. Estimates for the deficit ranged from $4.7 billion to $2.9 billion.

In December, Brazil ran a current account deficit of $2.92 billion, according to central bank data released last month.

In the 12 months through January, the deficit was equal to 1.75% of gross domestic product, compared with a deficit of 1.78% of GDP in the 12 months through December 2008.

The current account balance tracks a country's net flow of external transactions, including foreign trade, interest payments and services such as tourism. It is used to gauge a country's dependence on foreign capital.

Foreign direct investment in Brazil, Latin America's largest economy, totaled $1.93 billion in January, down from $4.82 billion in the same month of 2008.

In December, Brazil attracted a whopping $8.12 billion in FDI, largely due to the sale of an iron ore mine by steelmaker CSN. (Reuters)