Brazil's GDP grows 0.8% in the 1st quarter of 2024 driven by trade, points out IBGE
In the first quarter of 2024, Brazilian GDP registered a growth of 2.5%, totaling R$2.7 trillions in terms of the sum of final goods and services produced.
The Brazilian economy grew 2.7% in the first quarter of 2024 - Photo Reproduction/Internet
Brazil's Gross Domestic Product (GDP) recorded growth of 0.8% in the first quarter of 2024, compared to the previous quarter, according to the survey released by the Brazilian Institute of Geography and Statistics (IBGE), this Tuesday (4). This positive result is attributed, mainly due to the robust performance of the commerce sector, which stood out as the main driver of the economy in the period. In current values, the Brazilian economy totaled R$2.7 trillion between January and March.
The main driver of this growth was the services sector, which registered an increase of 1.4% in this period. Agriculture also had positive growth, with a variation of 11.3%. On the other hand, the industry showed a small drop of 0.1%. The services sector stood out in the quarter, with growth of 3% in Commerce, 2.1% in Information and Communication and 1.6% in Other service activities.
These results are in line with financial market expectations. In the first quarter of 2023, the Brazilian economy grew 2.5%, driven by the services sector. Throughout 2023, GDP grew 2.9%, totaling R$10.9 trillion in nominal terms, which places Brazil once again among the 10 largest economies in the world.
The Engine of Growth
According to Rebeca Palis, coordinator of National Accounts at IBGE, the economy in the first quarter had its growth entirely based on domestic demand. Regarding the composition of GDP, Rebeca highlights some activities. She mentions retail trade and personal services as areas that stood out due to the increase in family consumption. Furthermore, internet activity and systems development saw significant growth due to investments, as well as professional services, which impact the economy as a whole.
The expert comments that family consumption is growing due to the improvement in the Brazilian job market, the decline in the basic interest rate (Selic), lower inflation, the continuity of government programs to aid families and the reduction in default. after the implementation of the Federal Government's debt renegotiation program called Desenrola.
Contribution from other sectors
On the other hand, Rebeca explains that there was a change in the contribution of the external sector to economic growth in the first months of this year compared to previous years. She highlights that, due to imports (6.5%) being significantly greater than exports (0.2%), the external sector is in fact decreasing GDP. This is because, with the dollar cheaper, it has become easier to import, especially with investments in capital goods, while the demand for the main commodities exported by Brazil has been lower at a global level.
In 2022 and 2023, the external sector had contributed positively, with exports growing more than imports. In this first quarter this contribution turned negative. We are importing a lot of machinery and equipment and intermediate goods and the Real has appreciated", stated the coordinator.
Agriculture
Agriculture, traditionally a pillar of the Brazilian economy, showed a lower performance. Although it registered growth in the first quarter, Agriculture is not doing as well as in previous years, which has negatively impacted exports. During the period, the investment rate in Brazil corresponded to 16.9% of the Gross Domestic Product (GDP), slightly lower than the 17.1% recorded in the same period last year. Furthermore, the savings rate also fell, going from 17.5% in the first quarter of 2023 to 16.2% currently.
Economic perspectives in current values
In the first quarter of 2024, the Gross Domestic Product (GDP) reached R$2.7 trillion, with R$2.4 trillion coming from Value Added at basic prices and R$361.1 billion referring to Taxes on Products net of Subsidies , as explained by IBGE. Of the total, more than half of the supply comes from the services sector, with R$1.6 trillion. Industry contributed R$573.7 billion to GDP in the first quarter, while agriculture totaled R$192.2 billion. In relation to demand, household consumption reached R$1.8 trillion, government consumption was R$442.8 billion, and Gross Fixed Capital Formation (FCBF) reached R$458.8 billion.
