Brazilian economy grew 2.9%, says IBGE

Brazilian economy grew 2.9%, says IBGE


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The Gross Domestic Product (GDP) grew 2.9% in 2023, IBGE reported this Friday (1st). The variation was slightly below that recorded in 2022 (3%, according to revised data).

The result also came below the median expectation of economists and the Ministry of Finance’s own projection, both of 3%. According to the economic team, the carry-over (statistical loading) for 2024 is just 0.2% – that is, economic activity began the year with practically no momentum inherited from 2023.

IBGE data show that the Brazilian economy achieved some progress in the first half of last year, but then moved sideways throughout the second half.

In the first quarter of 2023, GDP increased 1.3% compared to the last quarter of 2022. It then rose 0.8% in the second quarter and had zero variation in both the third and fourth quarters.

From a supply perspective, the sector that grew the most last year was agriculture, with an increase of 15.1%, on the back of the record grain harvest. The services sector, the largest in the Brazilian economy, registered an increase of 2.4% over the previous year.

In the industrial sector, the variation was 1.6% – the strong increase in the extractive industry, of 8.7%, offset the 1.3% decline in the manufacturing industry.

From a demand perspective, GDP in 2023 was driven by household consumption expenditure, which rose 3.1%, and government spending (1.7%). On the other hand, productive investment, measured by Gross Fixed Capital Formation (GFCF), fell 3%. Exports of goods and services increased by 9.1%, while imports fell by 1.2%.

What are the expectations for GDP in 2024

The expectation of the market and the government itself is that economic growth will slow down this year.

The median projection of banks and consultancies is an expansion of 1.75%, according to the most recent edition of the Central Bank’s Focus bulletin.

The Economic Policy Secretariat (SPE) of the Ministry of Finance, in turn, projects an increase of 2.2% for GDP. In a note released this morning, the agency stated that this estimate reflects:

  • the smaller contribution from the agricultural sector, compared to 2023;
  • the recovery of industrial activity, guided by a resumption of productive investments and mineral extractive production;
  • stability in the pace of expansion of the services sector, “with the lower contribution of tax benefits being offset by the advance of credit and the resilience of the job market”.


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