UPDATE 2-Brazil Sept current account gap widens. FDI up

* Sept c/acct deficit $3.9 bln vs $2.45 bln yr ago

* Brazil’s current account gap wider than expected

* Brazil attracts $5.39 bln in foreign direct investment

(Recasts, adds comments, Oct forecasts, byline)

By Raymond Colitt and Isabel Versiani

BRASILIA, Oct 25 (BestGrowthStock) – Brazil’s current account
deficit widened more than expected in September as companies
leased more equipment abroad to meet booming domestic demand
and a strong local currency drove more Brazilians abroad on
holidays.

The current account deficit (BRCURA=ECI: ) widened to $3.9
billion in September from a gap of $2.45 billion in September
2009, the central bank said on Monday.

The result was above the median forecast for a deficit of
$3.7 billion, according to a Reuters survey of 11 economists.
The estimates ranged from $2.9 billion to $4.1 billion.

Driving the deficit was increased spending for services,
particularly the leasing of machinery and foreign travel by
Brazilians, the data showed.

As a result of a stronger real (BRBY: ) — it is up nearly 6
percent since late June — it has become cheaper for Brazilians
to travel abroad.

(For a graph on the real, see http://r.reuters.com/kuv79p]

But strong foreign direct investment combined with medium
and long-term foreign credits would provide ample financing of
the current account deficit, Altamir Lopes, head of economic
research at the central bank, told a news conference.

“In 2010, it is adequately financed and for 2011 the
outlook is good,” Lopes said.

Brazil attracted $5.39 billion worth of foreign direct
investment last month, the central bank said.

It was too early to tell whether recent, strong foreign
investment figures were indicative of a long-term trend, said
Lopes.

But a strong domestic economy, which is expected to grow
beyond 7 percent this year, was increasingly on global investor
radar screens he said, forecasting Oct. foreign direct
investment, or FDI, of $5 billion.

“Brazil is becoming a point of attraction for FDI. But we
need to wait and see whether this trend will continue,” Lopes
said.

For the 12 months through September, the current account
deficit was equal to 2.4 percent of gross domestic product,
compared with 2.32 percent through August, the central bank
data showed.

For October Lopes forecast a marginally smaller current
account deficit at $3.8 billion.

(Writing by Raymond Colitt and Ana Nicolaci da Costa;
editing by Andrew Hay)

UPDATE 2-Brazil Sept current account gap widens. FDI up