of this year. This was revealed by data from the Brazilian Institute of Geography and Statistics (IBGE), which indicated that the evolution of the activity was well above expectations, with robust services and industrial production that boosted activity as the effect of a bountiful harvest wore off.
He Gross Domestic Product (GDP) in Brazil grew compared to the previous quarter much more than the median of 0.3% expected in a Reuters poll of economists. The 3.4% increase over the same period in 2022 also exceeded the 2.7% rise projected by economists.
A slowdown in the largest economy in Latin America after revised growth of 1.8% in the first quarter, driven by seasonal changes of a agricultural sector robust.
Heavy industry and oil and iron: keys
In the second quarter of the year, the economic growth was fostered by the heavy industrywhich expanded 0.9% from the previous three months, driven by rising oil and iron ore production, IBGE said.
Services activity also contributed positively, increasing by 0.6% due to a stronger job market and a shift in consumer preferences away from goods after the pandemic. The agricultural production it fell 0.9% after a rise in the first quarter.
On the demand side, the household consumption led the way with an increase of 0.9%, helped by the president’s measures Luiz Inacio Lula da Silva to increase the disposable income of the working class.
How did public spending progress?
He public spending grew by 0.7%. By contrast, fixed investments advanced just 0.1% amid high borrowing costs and uncertainty about the new government’s policy mix.
He Central Bank of Brazil embarked on a cycle of monetary relief in August with a 50 basis point cut that brought its benchmark interest rate to 13.25%, after keeping the cost of credit stable for almost a year to combat inflation. Despite signaling future reductions, the authorities emphasized their objective of keeping rates in restrictive territory.
Although the interest rates remain highprivate economists surveyed by the central bankThey have been revising upward their annual forecast for the GDP.
Its latest weekly forecasts, published before the IBGE data, point to a growth of 2.31% this year, well above the estimate of 0.78% in January. Brazil’s economy expanded by 2.9% in 2022.
Source: Ambito
