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UPDATE 1-Brazil current account gap widens to 3% of GDP for first time since 2015

Jamie McGeever

2015@ (Adds detail, context)

BRASILIA, Nov 25 (Reuters) - Brazil's balance of payments position with the rest of the world deteriorated in October, central bank figures showed on Monday, as the current account deficit widened and investment inflows from abroad failed to cover the shortfall.

The current account gap widened more than expected to $7.9 billion as the trade surplus shrank, which meant the current account deficit in the 12 months to October reached 3.0% of gross domestic product for the first time since December 2015.

Revisions to the methodology of measuring investment income meant the current account deficit in recent years is wider than previously estimated, central bank figures showed. For example, it is now shown to be above 2.0% of GDP every month this year.

October's data showed the current account deficit grew to $7.9 billion, wider than the estimated $5.5 billion. That was the biggest deficit since July, and the second widest in nominal terms since January 2015.

Goods exports shrank 16.5% to $18.3 billion in October from the same month a year ago and imports rose 7.5% to $17.8 billion, while the services deficit rose 7.8% in October to $3.6 billion from $3.3 billion a year earlier, the central bank said.

The current account deficit so far this year of $45.7 billion is 41% larger than the $32.4 billion accumulated deficit in the first 10 months of last year, central bank figures show.

Foreign direct investment, which comfortably plugs the current account deficit most months, fell slightly from the month before to $6.8 billion, less than the $7.5 billion expected in a Reuters poll and not enough to plug the deficit.

As a share of GDP over the last 12 months, FDI was 4.35%. That was the lowest since June but at $79.5 billion, still more than enough to plug the corresponding deficit over the period of $54.8 billion.

(Reporting by Jamie McGeever; Editing by Toby Chopra and Chizu Nomiyama)

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