Brazil’s gross domestic product grew 1.2% in the second quarter, compared to the immediate prior three months, as announced Thursday (1) by the Brazilian Institute of Geography and Statistics (IBGE).
Compared to the same quarter in 2021, the increase was 3.2%. Brazilian GDP ends in the first half of 2022 with a 2.5% increase.
The current values amounted to 2.4 trillion Brazilian reais, compared to 2.249 trillion Brazilian reais in the first quarter.
According to IBGE’s Director of National Accounts, Rebeca Palis, as a result of the second quarter, the Brazilian economy has reached a level of only 0.3% below the peak recorded in the first quarter of 2014 and is 3% above the predetermined level. Epidemic.
This is the fourth consecutive quarter of growth in the country’s economic activity. In this release, the institute also revised results from previous quarters, bringing first-quarter growth to 1.1% from 1%.
Still within the revisions, the decline in the second quarter of 2021 moved from -0.2% to -0.3%. In the fourth quarter of 2021, growth increased from 0.7% to 0.8%. Looking at the new results, GDP has grown the most since the fourth quarter of 2020, when there was a 3.2% rise.
GDP also came in line with the expectations of the Fundação Getulio Vargas (FGV) index, which forecast a 1.1% increase in GDP for the period between April and June. The central bank preview pointed to a rise of 0.57%.
See the history in the graph:
Quarterly change in GDP – Photo: Arte g1
The surprise in this measure of economic activity was the performance of the industry, which accelerated by 2.2% in the second quarter. Compared to the same period last year, the increase was 1.9%.
But the economic driver was, again, the service sector, which accounts for about 70% of the country’s GDP. Services rose 1.3% in the quarter and 4.5% unlike the same period in 2021.
Household consumption grew by 2.6% compared to the first quarter of the year, and increased by 5.3% compared to the same period in 2021.
The activities of this sector have suffered the worst effects of the coronavirus pandemic on the economy, as they are highly dependent on human contact and movement of people.
“GDP growth in the first half of 2022 has surprised us,” says one economist.
Key features of the GDP for the second quarter:
- Services: 1.3%;
- Industry: 2.2%;
- Agriculture: 0.5%;
- Household consumption: 2.6%;
- Government consumption: -0.9%;
- Investments: 4.8%
- exports: -2.5%;
- Import: 7.6%.
PIB stamp by sectors – Photo: Editoria de Arte / g1
According to IBGE, the industry benefited from a 3.1% increase in electricity, gas, water, sewage and waste management activities, as well as 2.7% in construction, 2.2% in extraction and 1.7% in transformation. Each compared to the previous quarter.
But in the first half, construction (9.5%), electricity, gas, water, sewage and waste management (9.2%) did well, while extractive industries (-3.2%) and transformation (-2.1%) declined.
In the cumulative period in four quarters versus the immediate prior period, the industry was close to stabilizing, with an increase of 0.1%.
Services also performed well in 2022. Between the first and second quarters, the most notable were other service activities, which increased by 3.3%, transportation, warehousing and mail, by 3.0%, information and communications, by 2.9%, and commerce, by 1.7%.
Then financial and insurance activities and related services (1.4%) and real estate (0.3%). The only decline in this sector was in the areas of administration, defense, public health, education and social security (-0.8%).
The best result in the classroom is from other service activities which accrue as high as 13.1%. Also on a positive note, transportation, warehousing and mail rose 10.6%, information and communications 5.1%, administration and defense, public health, education and social security 2.0%, and real estate activities 0.4%.
Only financial, insurance and related services activities (-0.3%) and trade (-0.1%) declined in the 2022 window.
GDP Q2 from a supply perspective – Photo: Arte g1
Agriculture is still on the ice
The positive result for agriculture in the second quarter (0.5%) is still not enough to take it out of the position of the worst performer among the sectors. In 2022, it recorded a decrease of 5.4% compared to the same period in 2021.
For comparison, services rose 4.1% and industry 0.2%.
In the second quarter, agriculture also declined by 2.5% compared to the same period in 2021. According to IBGE, agricultural products that had high yields in this period, showed an underestimation of annual production and a loss of productivity.
This is the case of soybeans (-12.0%) and rice (-8.5%). “Maize and coffee showed growth in 2022, estimated at 27.0% and 8.6%, respectively,” the institute says.
GDP variance from a demand perspective – Photo: Arte g1
high household consumption
From a demand perspective, household consumption was an absolute highlight, ranking fourth in a row and registering a growth of 2.6% in the quarter. Against the same period in 2021, it increased by 5.3%.
Government consumer spending fell 0.9% between the two quarters. Compared to the same quarter of 2021, there is a slight increase of 0.7%.
In class analysis, the news is better. Regarding the same window for 2021, the increase was 3.7% in household consumption and 2.0% in government consumption.
Gross fixed capital formation performed well, increasing by 4.8% between the first and second quarters. The growth was 1.5% compared to the same period last year.
The investment rate reached 18.7% of GDP in the second quarter, which is a stable result compared to the same period of the previous year (18.6%).
In the external sector, there was a reversal in performance between exports and imports. Exports of goods and services decreased 2.5%, while imports grew 7.6% compared to the first quarter of 2022.
Compared to the same quarter of 2021, exports decreased by 4.8%, while imports decreased by 1.1%.
Central Bank data has been excluded
For the second time in a row, the Integrated Economic Accounts (which includes the country’s savings rate and borrowing requirement rate) and the Quarterly Financial Account (which shows the assets most used to finance the state).
“The central bank voted in favor of the strike, but the disclosure of the financial statement continued to be delayed,” IBGE’s director of national accounts, Rebecca Pallis, justified.
The good second-quarter result and positive leading indicators in recent months have led to an upward revision of the outlook for economic growth in 2022. Analysts point to a 2.1% rise in GDP in the year, while the government estimates a 2% rise.
On the other hand, part of the forecast for 2023 was revised downward, with some homes even citing a downside risk, amid persistent inflation, rising interest rates, fears of a global recession and uncertainties related to Brazil’s election race.
According to the central bank’s Focus Bulletin, market estimates point to a rise of only 0.37% in GDP for the coming year.
In 2021, Brazil’s GDP grew by 4.6%, after declining by 3.9% in 2020.
Financial Education: Learn about GDP and how it is calculated
GDP for the second quarter of 2022
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