GDP changed 0.1% in the third quarter of 2023

Economic activity in the third quarter surprised the expectations of the most pessimists, who were betting on a decline in GDP, which is the sum of final goods and services produced by the country. Data released by the Brazilian Institute of Geography and Statistics (IBGE) show that economic activity varied 0.1%, compared to the second quarter.

The indicator is once again at the highest level in the historical series and operates 7.2% above the pre-pandemic level, recorded in the fourth quarter of 2019.

Sector performance

Services and industry advanced 0.6% compared to the second quarter, while Agriculture fell 3.3%.

In industrial activities, there were positive changes in extractive industries (0.1%) and manufacturing industries (0.1%). Electricity and gas, water, sewage and waste management activities grew by 3.6% and construction fell by 3.8%.

In services, there was a positive change in: financial, insurance and related services activities (1.3%), real estate activities (1.3%), information and communication (1.0%), other service activities (0.5 %), administration, defense, public health and education and social security (0.4%) and commerce (0.3%). On the other hand, transport, storage and mail activity fell 0.9%.

On the expenditure side, gross fixed capital formation, which measures company investment, fell 2.5% compared to the previous quarter. Household consumption expenditure rose 1.1% and government consumption expenditure increased 0.5%. In the external sector, while exports of goods and services increased by 3.0%, imports of goods and services fell by 2.1% compared to the second quarter of 2023.

Comparison with 2022

When compared to the same period of the previous year, GDP grew 2.0% in the third quarter of 2023.

Agriculture grew 8.8% compared to the same period in 2022, mainly with the performance of some agricultural products that have a relevant harvest in the third quarter, such as: corn (19.5%), sugar cane (13 .1%), herbaceous cotton (12.5%) and coffee (6.9%). There was also a positive contribution from the estimates for livestock farming in the period analyzed.

The industry registered an increase of 1.0%. Among its activities, the best result came from electricity and gas, water, sewage, waste management activities (7.3%), favored by higher electricity consumption, mainly residential, and by the year’s green flags. Extractive industries also grew (7.2%) due to the increase in oil and gas extraction. Construction fell (-4.5%) in the period.

This drop is explained by the decline in occupation and production of inputs typical of this activity. There was also a drop in manufacturing industries (-1.5%), the result of which was mainly influenced by the decline in machinery and equipment, chemical products, the automotive industry and metallurgy.

Services GDP rose 1.8% compared to the same period in 2022, with emphasis on the increase in financial activities, insurance and related services (7.0%). There were also increases: real estate activities (3.6%), information and communication (1.6%), transport, storage and mail (1.6%), Other service activities (1.1%), commerce (0. 7%) and administration, defense, public health and education and social security (0.4%).