Brazilian economy grows 0.9% in the second quarter of 2023

The Brazilian economy grew 0.9% in the second quarter of this year, compared to the first three months of the year. The Gross Domestic Product (GDP), that is, the sum of all goods and services produced in the country, totaled R$ 2.651 trillion. The data was disclosed this Friday (1st) by the Brazilian Institute of Geography and Statistics (IBGE).

Compared to the second quarter of last year, the Brazilian economy grew by 3.4%. GDP accumulates a 3.2% increase in the 12-month period. In the first half, the accumulated increase was 3.7%.

The growth of 0.9% in the second quarter of 2023 compared to the immediately previous quarter is the eighth consecutive increase in this type of comparison, but it also points to a slowdown, since in the first three months of the year there was growth of 1.8% ( value revised by IBGE) compared to the last quarter of 2022.

The data released today places the Brazilian economy at a level 7.4% above the pre-pandemic level and positions it at the highest point in the historical series.

Sectors

The performances of industry (0.9%) and services (0.6%) explain the GDP growth in the last quarter. In the case of services, the positive influence is greater because activities account for 70% of economic dynamics.

“What drove this result within the service sector were financial services, especially insurance, such as life, auto, property and financial risk. Among the other services, those aimed at companies, such as legal and accounting services, for example, also stood out”,

explains the coordinator of National Accounts at the IBGE, Rebeca Palis.

Industry had growth for the second quarter in a row, with emphasis on mining and quarrying (1.8%), driven by the extraction of oil and gas and iron ore, products related to export.

As a whole, the industry remains above the pre-pandemic level, but has not been able to overcome the highest point in the historical series, reached in the third quarter of 2013.

farming

Of the three major sectors of the economy, agriculture was the only one to retreat in the quarter (-0.9%). The retraction is mainly due to the high basis of comparison, since the sector had been the main driver of GDP in the first three months of the year.

“If we look at the interannual indicator, we see that agriculture is the fastest growing activity. The result is lower because it is compared to the previous quarter, which had a significant increase. This happened because 60% of soy production is concentrated in the first quarter”,

analyze Rebecca.

Consumption

From the perspective of demand, household consumption increased by 0.9% in the second quarter. It is the biggest increase since the same period last year.

“On the positive side, the job market has been constantly improving, there is credit growth and various government measures such as tax incentives, see car price reductions, and readjustments in income transfer programs, notably Bolsa Família. On the other hand, interest rates remain high, which makes it difficult to consume durable goods, and families remain indebted because, despite the debt renegotiation program, they take time to recover”,

evaluates Rebecca.

Government consumption grew by 0.7%, representing the fourth consecutive positive result. Investments, on the other hand, showed stability (0.1%), maintaining the investment rate at 17.2% of GDP, lower than that of the same period last year (18.3%).

The savings rate went from 18.4% in the second quarter of last year to 16.9% in the same period this year. The end of the pandemic explains this behavior, according to the IBGE analyst: “during the pandemic, there was an increase because families with higher incomes, because they could not consume certain services, saved this excess money. With the normalization of demand and supply of services, the savings rate dropped.”

Exports (2.9%) and imports (4.5%) increased compared to the first quarter of this year.

Comparison

Compared to the second quarter of last year, GDP increased by 3.4%. On the same basis of comparison, agriculture grew 17%, the best result among the sectors. Industry, on the other hand, grew 1.5%; and services, 2.3%.

In the first half of this year, the Brazilian economy increased by 3.7%, with emphasis on agriculture (17.9%), again well above industry (1.7%) and services (2.6%). “[A agricultura] had a great result because of the record harvests of soy and corn”, explains Rebeca.

Read more:

Creative economy will create 1 million new jobs by 2030, points out CNI

INDT boosts connectivity in the Amazon with a private 5G network

Manaus Energy Efficiency Center exceeds visitation goal in the first half