Brazil’s Economy Grows 3.4% in 2024, Marking Strongest Expansion Since 2021

Brazil’s economy expanded by 3.4% in 2024, the fastest growth since 2021, according to Gross Domestic Product (GDP) figures released on Friday (7) by the Brazilian Institute of Geography and Statistics (IBGE).

This marks the country’s fourth consecutive year of economic growth, bringing Brazil’s GDP to R$11.7 trillion.

The services and industrial sectors drove the expansion, posting year-over-year growth rates of 3.7% and 3.3%, respectively. In contrast, agriculture contracted by 3.2%.

Economic Growth Over Recent Years

2020 (pandemic year): -3.3%
2021: 4.8%
2022: 3%
2023: 3.2%
2024: 3.4%

GDP can be analyzed through production (performance of economic activities) or consumption (spending and investment).

From a production standpoint, IBGE highlighted three key sectors that accounted for nearly half of the GDP growth in 2024:

– Other service activities (+5.3%)
– Manufacturing industry (+3.8%)
– Retail and trade (+3.8%)

Within the industrial sector, construction stood out, expanding 4.3%.

On the other hand, agriculture saw a downturn after a sharp 16.3% expansion in 2023. The decline was largely attributed to adverse weather conditions, which negatively affected key crops such as soybeans (-4.6%) and corn (-12.5%).

Household Consumption and Investments on the Rise

On the consumption side, household spending jumped 4.8%, fueled by higher disposable income. According to IBGE’s National Accounts Coordinator, Rebeca Palis, several factors contributed to this trend:

“Household consumption benefited from a combination of factors, including government income transfer programs, continued improvements in the labor market, and lower average interest rates compared to 2023,” Palis explained.

Brazil ended 2024 with an unemployment rate of 6.6% —the lowest on record.

Gross Fixed Capital Formation (GFCF), a key measure of investment, surged by 7.3%, though its overall impact on GDP was smaller than that of household consumption. Meanwhile, government spending grew by 1.9%.

On the external front, imports soared by 14.7% in 2024, while exports rose 2.9%.

Fourth-Quarter Performance

In the fourth quarter of 2024, the economy grew by just 0.2%, reflecting a period of relative stability.

Palis noted that inflation and rising interest rates—measures taken by Brazil’s Central Bank to control prices—curbed economic expansion during the last three months of the year.

“The GDP remained nearly stable in Q4, with investment growth offsetting a decline in household consumption. Inflation, particularly in food prices, accelerated during the period, which impacted consumer spending,” Palis said.

“The labor market continued improving, but at a slower pace. Additionally, the Central Bank started raising interest rates in September, and that had an impact on the fourth quarter’s performance,” she added.

Brazil’s GDP per capita reached R$55,247.45 in 2024, marking a 3% increase from 2023, adjusted for inflation.

With steady growth and a robust labor market, Brazil’s economy maintains a positive trajectory, though inflation and interest rate trends remain key factors to watch in 2025.

Source: Agência Brasil

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