Macro and Politics

* The current account posted a surplus of USD4.05bn in August, slightly below our forecast of USD4.4bn, while standing above the market median expectation of USD3.5bn. The cumulative current account deficit for Jan–Aug reached USD31.5bn, widening significantly from USD19.7bn in the same period last year. On a trailing 12-month basis, the current account deficit increased to USD42.1bn from USD41.5bn in July. Excluding gold and energy, the current account recorded a surplus of USD8.2bn in August, while the trailing 12-month core current account surplus narrowed to USD26bn from USD27bn. Preliminary foreign trade data from the Ministry of Trade point to a broadly unchanged trade deficit in September. Exports rose by 15.4% y/y to USD26bn, while imports increased by 5.9% y/y to USD31.2bn, leaving the trade deficit unchanged from August at USD5.2bn. The trailing 12-month foreign trade deficit narrowed to USD95.8bn from USD97.5bn. We expect the current account to post a surplus of USD2.9bn in September. Our projections point to a narrowing in the balance of payments-defined foreign trade deficit to USD3.3bn, alongside a decline in net travel revenues to USD6bn and a services surplus of around USD8.1bn. We maintain our year-end current account deficit forecast at USD54bn, equivalent to 3% of GDP.