Brazil’s GDP advances 2.9% in 2022, even with the 4th quarter of decline

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In the final installment of the year, economic activity fell by 0.2%, marking the gradual slowdown of the economy throughout the year. The service sector — which includes bars, restaurants, hotels, beauty salons and other activities of the kind — boosted the Brazilian GDP in 2022 Fábio Tito/g1 Brazil’s Gross Domestic Product (GDP) grew by 2.9% in 2022, released this Thursday (2) the Brazilian Institute of Geography and Statistics (IBGE). Activity was greatly boosted by the services sector, the mainstay of the Brazilian economy, which accelerated mainly in the first half. Fiscal stimuli given to the economy boosted the numbers, along with the so-called “reopening effect”, in which the return to bars, restaurants, beauty salons, tourism and other activities caused a significant increase in consumption. In the second half, however, the two phenomena lost strength and caused a gradual slowdown in the economy. The result was a drop of 0.2% in the 4th quarter of the year, interrupting a sequence of five positive quarters. Even so, compared to the 4th quarter of 2021, activity had an advance of 1.9% in 2022. In 2021, the Brazilian GDP had grown by 5%, also in the wake of the economic recovery after the impacts of the Covid-19 pandemic . GDP evolution year on year in % Editoria de Arte/g1 Main highlights of GDP in 2022: Services: 4.2% Industry: 1.6% Agriculture: -1.7% Household consumption: 4.3% Government consumption : 1.5% Investments: 0.9% Exports: 5.5% Imports: 0.8% Highlight for services In current values, the Brazilian GDP totaled R$ 9.9 trillion in 2022, with an investment rate of 18. 8%. Per capita GDP had a real increase of 2.2% compared to the previous year and reached R$ 46,154.60 in 2022. As expected, the services sector was the absolute highlight from the perspective of supply, with an increase of 4.2% in the year . In current values, it was R$ 5.8 trillion in the year. According to IBGE data, all service activities grew this year: Other service activities: 11.1%; Transport, storage and mail: 8.4%; Information and communication: 5.4%; Real estate activities: 2.5%; Administration, defense, public health and education and social security: 1.5%; Trade: 0.8%; Financial activities, insurance and related services: 0.4%. “Of this 2.9% growth in 2022, Services accounted for 2.4 percentage points. In addition to being the sector with the greatest weight, it was the one that grew the most, which demonstrates how high its contribution to the economy was during the year”, analyzes Rebeca Palis, coordinator of National Accounts at the IBGE. Together, services and industry represent around 90% of the Brazilian GDP. Industry makes little progress, agriculture falls Industry had, once again, mixed results, in which part of the sectors benefited from the economic cycle while others struggled to achieve results. For the IBGE, the positive highlight came from the Electricity and gas, water, sewage, waste management activities sector, which rose 10.1% in the year, which allowed for more favorable tariff flags throughout 2022. result also for the Construction sector, which rose by 6.9%. “The growth of this activity is closely related to the recovery from the water crisis of 2021. In addition to the growth of the economy, there was a shutdown of the thermal plants, reducing production costs, which contributes to the increase in the added value of the activity”, he says. Rebeca Palis, from IBGE. “Moreover, the Construction activity, with a rise of 6.9%, corroborated by the increase in its occupation, was influenced by the election year, which always presents a greater amount of public works.” At the other end, Transformation Industries (-0.3%) and Extractive Industries (-1.7%) had losses due to productive declines in metallurgy, metal, wood, sludge and plastic production, and also in iron ore extraction. The 1.7% drop in agriculture and livestock happens after a reduction in agricultural production. Livestock and Fishing grew, but were unable to reverse the negative result. “Soybean, the main product of the Brazilian crop, with an estimated production drop of 11.4%, was the one that most pulled the result of Agriculture and Livestock down in the year, being impacted by adverse climate effects”, says Palis. GDP Analysis – offer perspective Editoria de Arte/g1 Household consumption in the spotlight From the demand perspective, household consumption was the main driver of the economy, up 4.3% in the year. This was another number leveraged by the reopening effect, after the release of activities impacted by the Covid-19 pandemic. “It is important to divide the internal demand from the external sector, because of the 2.9% of growth, 2 pp came from internal demand, mainly from family consumption, and 0.9 pp from external demand, which also rose, since our exports grew more than imports,” says Rebeca Palis. Remembering: in the external sector, Exports of Goods and Services rose 5.5%. Imports of Goods and Services, 0.8%. According to economist Juliana Trece, from the Brazilian Institute of Economics at the Getulio Vargas Foundation (Ibre/FGV), around 80% of consumption growth in 2022 can be explained by the consumption of services. Also noteworthy is the consumption of accommodation and food, which represented around 30% of total consumption in the year. GDP analysis – demand perspective Editoria de Arte/g1 Falling quarter The Brazilian GDP returned to the negative field in the 4th quarter of 2022. Not even the services sector, which helped the annual result so much, went unscathed: there was a drop in Commerce ( -0.9%) and in Administration, defense, public health and education and social security (-0.5%). “When we analyze the Industry sector, the only increase was in Extractive Industries due to oil extraction. All the rest fell”, says Rebeca Palis. See below. Main GDP highlights in the 4th quarter: Services: 0.2% Industry: -0.3% Agriculture: 0.3% Household consumption: 0.3% Government consumption: 0.3% Investments: -1.1% Exports: 3.5% Imports: -1.9% Quarterly variation of the Brazilian GDP Editoria de Arte/g1 Perspectives After five quarters of increases driven by the recovery of the services sector, the result of the 4th quarter of 2022 shows that increases in basic interest rate, the Selic, made by the Central Bank since 2021 are finally beginning to have stronger consequences for the economy. In addition to the signs of a slowdown in activity, economists still expect future effects on the job market and on lending — and the expectation is that these effects will continue to have repercussions on GDP until the end of next year. The scenario is a combination of high interest rates, still significant inflation and greater household indebtedness. The projection of economists for 2023 is that GDP will grow by just 0.84%, according to the latest Focus report by the Central Bank. For the specialists consulted by the g1, the trend is that the activity has a more restrained growth this year, influenced not only by the domestic environment, but also by the international scenario, whose projections are also of deceleration. Initial plugin text Initial plugin text

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