The Brazilian economy continued to grow in the second quarter. The Gross Domestic Product (GDP) advanced 0.9% in the period, compared to the first three months of the year – well above the median of 0.3% projected by the market. The data was disclosed by the IBGE this Friday, 1st. Compared to the same quarter of 2022, the increase was 3.4%.
Despite the pace of growth having been lower than that found in the first three months of the year – 1.8%, as revised by the IBGE – economists saw “resilience” in economic activity. “It turned out better than expected until a few months ago, which shows that there is resilience”, said Alessandra Ribeiro, partner and economist at consultancy Tendências
This scenario, however, tends to change in the second half of the year. In the market’s assessment, if the first half was marked by growth, the second should be one of deceleration, with the possibility of even a slight retreat. “I work with the economy on the sidelines in the second half of the year,” said Alessandra. “This context for the Brazilian economy is one of deceleration. We are seeing the global economy lose strength, and the Brazilian economy should feel this effect”, completed Felipe Salles, chief economist at C6 Bank.
Another point for the deceleration has to do with monetary tightening. The fall in the basic interest rate (Selic) takes a period to benefit the economy, and should result in some relief for activity only next year. “It is an economy that should cool down (in the second half) and then start to resume throughout 2024”, said Salles.
Even so, the market announced a wave of upward revisions to the projections for the closed GDP in 2023. Among other factors, this change takes into account the so-called statistical loading (when the result of one quarter has a positive impact on the following, assuming variation null in these following periods). This number is already 3.1%, increasing the chances of a higher number than the 2.9% of 2022.
Research by Projeções Broadcast showed that the median for GDP in 2023 rose from 2.4% to 3%. Estimates now range from 1.5% to 3.3%. For GDP in the third quarter, at the margin, the median changed from stability (0%) to a decrease of 0.1%. The intermediate projection for the fourth quarter changed from a drop of 0.1% to stability.
Industry and services pull results
According to IBGE figures, the 0.9% rise in GDP in the second quarter is largely due to the performance of industry and the services sector. In the industry cut, the increase was 0.9% compared to the first three months of the year – the most pronounced variation since the second quarter of 2022, when the segment had grown by 1.2%.
The data referring to the service sector indicated an increase of 0.6%. It’s been 12 quarters without negative variations in the segment. This advance was disseminated among the segments, with emphasis on financial activities (2.30%), transport and storage (0.90%) and construction (0.70%).
With a harvest concentrated in the first quarter, agriculture fell by 0.9%, but this fall was milder than the projections indicated. Compared to the second quarter of 2022, the increase remained strong – 17%.
From the perspective of demand, household consumption grew by 0.9% in the second quarter compared to the first, which represented the biggest advance since the second quarter of 2022 (1.6%), while government consumption marked an increase of 0. 7% on the same basis of comparison.
Over the past few months, data released on commerce, services, industry and the labor market have shown signs of resilience in the economy. As a result, part of the projections that pointed to a drop in GDP in the second quarter, compared to the first three months of the year, began to be revised to an expansion.
This resilience can be explained by both internal and external factors. Internally, the increase in income transfers by the government through Bolsa Família, the readjustment above inflation in the minimum wage and the anticipation of the 13th salary for retirees helped to offset the monetary tightening in force in the country – currently, the rate basic interest is at 13.25% per annum. On the international scene, global activity showed signs of strength, especially in the United States, contributing to the country’s exports.
“The composition of GDP was even better (than in the first quarter)”, stated Silvia Matos, researcher at Ibre/FGV).
The information is from the newspaper O Estado de S. Paulo.