Brazil’s economy, Latin America’s largest, grew 1.4% in the second quarterabove market expectations, according to data released Tuesday by the Brazilian Institute of Geography and Statistics (IBGE).
After results close to zero in the last two quarters of 2023 and 1% in the first of 2024, the neighboring country is extending its rebound.
At the sectoral level, The expansion of the Gross Domestic Product (GDP) was led by industry, which grew 1.8% over the previous quarter, followed by services (1%). Agriculture fell by 2.3%, IBGE reported.
Compared to the same quarter last year, GDP – the sum of all goods and services produced in the country – grew by 3.3%.
The IBGE also revised its first-quarter growth figure to 1%, compared with the 0.8% previously reported.
Brazil: economic growth better than expected
Economic growth in the second quarter exceeded market expectations, which placed the expansion at 0.9%according to the average of more than 70 estimates from consulting firms and financial institutions surveyed by the newspaper Valor Económico.
This is good news for President Luiz Inácio Lula da Silva.who often repeats that the Brazilian economy will experience growth greater than that predicted by experts.
The government expects GDP growth of 2.5% this year, compared to a market forecast of 2.46%.
Rebeca Palis, an analyst at IBGE, highlighted a “end of the leading role of agriculture” in economic momentum during the second quarter.
“Industry stood out this quarter, especially electricity and gas, water, sanitation, waste management and construction”said.
But growth in household and government spending and investment also contributed, driven by improvements in the labor market, a reduction in interest rates and the availability of credit, according to the analyst.
Brazil’s unemployment rate fell to 6.8% in the May-July quartera reduction of 1.1 percentage points compared to the same period in 2023 (7.9%).
While, Inflation rose 0.38% in July and reached 4.50% in 12 monthsaccording to data from IBGE.
Source: Ambito
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