Brazil’s Deficit Falls as Profits Flow to Foreign Owners

Brazil’s current account deficit narrowed 42% in September, but Brazilian companies sent more profits and dividends to foreign owners as the goods trade surplus grew. The Banco Central do Brasil reported Monday, Oct. 26, that the deficit fell to US$5.1 billion from US$8.8 billion in September 2025. The headline improvement comes with a clear split: more goods exports than imports, alongside large payments flowing out to foreign investors.

Trade Surplus, Uneven Flows

Brazil exported US$34.6 billion in goods in September, up 12.9% year-on-year, while imports fell 1.7% to US$27.7 billion. That left a US$6.9 billion trade surplus, US$4.4 billion higher than a year earlier. The central bank said the larger goods surplus mainly drove the narrowing current account deficit.

The current account tracks goods, services and income flows between Brazil and the rest of the world. Its improved balance doesn’t mean every category moved in the same direction. Services recorded a US$5.2 billion deficit, up from US$4.8 billion. Brazilians spent US$2.3 billion abroad on travel, an increase of 19.3%, while foreign visitors spent US$0.9 billion in Brazil, up 8.3%.

Profits Leave; Investment Arrives

Brazil paid foreigners US$7.2 billion more in profits, dividends and interest than it received. That primary-income outflow compared with US$6.9 billion a year earlier. Profits and dividends sent to foreign owners of Brazilian companies rose 13.9% to US$5.1 billion, while net interest payments fell 12.2% to US$2.2 billion. The accounts show the difference between investment entering the country and income returning to owners abroad.

Net foreign direct investment totaled US$11.3 billion in September, up from US$9.6 billion a year earlier, including US$3.8 billion in reinvested profits. Over 12 months, foreign direct investment reached US$88.3 billion, or 3.43% of GDP—about 147% of the 12-month current account deficit. Meanwhile, investors in Brazilian shares and bonds sold a net US$2.1 billion in September, though over 12 months they bought a net US$5.1 billion.

The 12-month current account deficit stood at US$60.0 billion, or 2.33% of GDP, down from 2.50% in August and 3.57% a year earlier. These figures describe national financial flows; the report doesn’t identify how the trade changes affect particular workers or households, nor does it describe a community response or any legislative proposal.

A Reserve Drawdown, No Clear Trend

Brazil’s international reserves ended September at US$362.8 billion, down US$9.8 billion during the month. The decline included US$6.2 billion from price and currency moves and US$2.0 billion in dollar sales in the spot market. Partial data through Oct. 21 showed a trade-related foreign-exchange surplus of US$3.9 billion.

The central bank’s report cautioned that September’s smaller current account deficit might not last; it wasn’t yet clear whether the decline marked a lasting trend or a one-month swing. The same report noted that profit and dividend payments had increased even as interest costs fell. The trade figures improved. The flow of earnings to foreign owners did too.