Busy bars and restaurants in one of the downtown squares on a weekend in the city of Rio de Janeiro.Leonardo Carrato
Brazil’s gross domestic product (GDP) grew by 0.9% in the second quarter of the year compared to the previous quarter, the Brazilian statistics institute IBGE reported this Friday. Despite the subdued growth, the data surprised financial market analysts, who expected an increase of just 0.3%. “We are overcoming the skepticism about GDP growth, now we have positive growth data for the country,” celebrated the number two in the Ministry of Economic Affairs, Dario Durigan, on Friday.
The Brazilian economy grew between April and June mainly thanks to industry, which grew by 0.9% thanks to the promotion of raw materials extraction, construction and electricity, water and waste management. In second place is the services sector, which represents 70% of Brazil’s GDP and which has not experienced negative fluctuations for 12 quarters. It grew by 0.6%. Finally, the strong agricultural and livestock sector fell by 0.9%, although this decline can be explained by the fact that there was a record growth of 21% in the first quarter thanks to an exceptional harvest.
According to the Statistics Institute, family consumption increased by 0.9% (the strongest increase in a year), due to the decline in inflation, readjustments in income distribution programs and the improvement in the labor market. Government spending, on the other hand, rose by 0.7%. Compared to the first quarter of 2023, exports increased by 2.9% and imports of goods and services by 4.5%.
In a year-on-year comparison, the picture of the Brazilian economy is somewhat more attractive: compared to the same quarter of 2022, the South American giant’s GDP grew by 3.4%, and cumulative growth over the last 12 months was 3.2%. In the first semester the progress is 3.7% compared to the same period in 2022.
The government expects the economy will not maintain the same pace in the coming months as at the beginning of the year, but still expects to end 2023 with GDP growth of 2.5%, higher than before months was forecast. back.
Positive data from the labor market was also released this week: in the May-July quarter, unemployment fell to 7.9%, the best level in this period since 2014. There are currently 8.5 million people living in Brazil. People out of work, 13.8% less than a year ago.
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