Brazil’s economy grows 2.5% in first quarter

The Brazilian economy grew by 2.5% in the first quarter of the year, compared to the same period last year. Compared to the last quarter of 2023, the gross domestic product rose by 0.8%, better than analysts’ forecasts of 0.7%

Over the past 12 months, the country’s economy has grown by 2.5%. These figures were released on Tuesday (4), by the government’s statistics agency IBGE. In current values, Brazil’s GDP stands at BRL 2.7 trillion (USD 515 million).

Industry and services grew at 2.8% and 3% respectively, compared to the same period last year. Agriculture was down by 3%.

“For climate reasons, particularly El Niño, it was already known that this wouldn’t be a good year for agriculture,” IBGE analyst Rebeca Palis explained.

Agricultural products with significant harvests at the start of the year showed a drop in estimated annual production compared to the same period last year, including soybeans (-2.4%), corn (-11.7%), tobacco (-9.6%) and cassava (-2.2%).

The growth in industry was driven by extractive industries (5.9%), which posted the highest result driven by an increase in both oil and gas extraction and iron ore.

Household consumption (4.4%) and government spending grew compared to the first quarter of 2023. Gross fixed capital formation rose 2.7%. Exports grew 6.5%, and imports 10.2%. In the first quarter of 2024, the investment rate reached 16.9% of the GDP.

Brazil’s quarter-on-quarter growth
The 0.8% quarter-on quarter increase follows a contraction of 0.1% in the fourth quarter of 2023. This is the best result since the 0.9% increase in the second quarter of 2023. The service sector drove up the change, particularly retail and personal services.

The estimates do not take into account the damage caused by April’s flooding in the southern state of Rio Grande do Sul.

Source: ANBA

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