Balance of payments report confirms expectations for entire year
The financial account has shown signs of deterioration since the beginning of 2016. Long-term loans are declining, and portfolio inflows and shortterm borrowing are rising in lieu of foreign direct investment and long-term loans.
The latest data may not be a sign of a new source of economic stress to add tothe list, but simply the continuation of a trend that began in February 2016.
The tendency to use reserves or resort to net errors and omissions throughout 2017 may continue, especially if tourism revenue continues to fall. However, an increase of $3 billion to $4 billion in the current account deficit is not that dramatic given that oil prices maybe 20 percent higher on average, compared with 2016. The deficit in January is slightly high, given that exports rose significantly in the period. Still, it is completely in line with expectations of a marginally higher current account deficit this year. Reserves need to be observed carefully.