Brasilia. Brazil’s economy – Latin America’s largest – surprised on the upside in the second quarter, driven by the industrial sector, higher household spending and investment, which offset the impacts of severe flooding in the south of the country, reinforcing expectations of a solid performance for the full year.
The gross domestic product (GDP) registered a growth of 1.4 percent in the second quarter compared to the previous quarter, and of 3.3 percent in the annual comparison, reported the Brazilian Institute of Geography and Statistics (IBGE) on Tuesday.
The data showed a rebound in the Brazilian economy above market expectations, after results close to zero in the last two quarters of 2023 and 1.0 percent in the first of 2024 in the quarterly comparison.
At the sectoral level, GDP growth in the second quarter was led by industry, which grew 1.8 percent compared to the previous quarter. The services sector – the driving force of the Brazilian economy – also contributed with an increase of 1.0 percent compared to the first quarter. The agricultural sector, on the other hand, decreased 2.3 percent.
On the demand side, fixed business investment rose 2.1 percent, while household consumption, boosted by a strong labor market, rose 1.3 percent, the same rate of growth as government spending.
The results are good news for President Luiz Inácio Lula da Silva, who often repeats that the Brazilian economy will experience growth that is greater than that predicted by experts. “Growth that is added to the increase in jobs, family consumption and a better quality of life,” Lula celebrated on the Bluesky network.
Finance Minister Fernando Haddad said the government is likely to revise up its full-year economic growth forecast from the current 2.5 percent, which it had kept unchanged in July.
In May, the worst flooding in southern Brazil’s history hit the booming agricultural state of Rio Grande do Sul, one of the country’s largest economies, accounting for about 6.5 percent of Brazil’s GDP, killing more than 180 people and displacing hundreds of thousands, prompting a federal government relief effort totaling more than 27 billion reais ($4.8 billion).
The agricultural sector, in which Brazil is a world power, “has shown great volatility in recent quarters, perhaps resulting from a more challenging climate environment,” said economist André Perfeito, noting that investments will further boost Brazilian growth.
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– 2024-09-08 04:55:36
