The Gross Domestic Product (GDP) grew 1.2% in the second quarter of this year compared to the previous quarter, marking the fourth consecutive positive result of the indicator after the 0.3% decrease in the second quarter of last year. The GDP, which is the sum of final goods and services produced in Brazil, reached R$ 2.404 trillion in current values, informed the Brazilian Institute of Geography and Statistics (IBGE) this Thursday (1).
In comparison with the second quarter of last year, GDP growth was 3.2%.
The number was higher than expected. Expectations in the Refinitiv survey were for growth of 0.9% over the first quarter and 2.8% over the same period of the previous year, driven mainly by services.
As a result, GDP increased 2.5% in the first half of the year and the country’s economic activity is 3.0% above the pre-pandemic level, recorded in the fourth quarter of 2019, reaching the second highest level in the series, behind only that achieved in the first quarter of 2014.
As expected, GDP was driven by the 1.3% rise in services. “Services are weighing 70% of the economy, so they have a greater impact on this result. Within services, other service activities (3.3%), transport (3.0%) and information and communication (2.9%) advanced and led to this increase. In other service activities, there are face-to-face services, which were dammed during the pandemic, such as restaurants and hotels, for example”, explains the coordinator of National Accounts at IBGE, Rebeca Palis. As a result, the other service activities subsector is 4.4% above the pre-pandemic level.
In industry, the 2.2% rise was the second consecutive positive result for the sector, after the 0.9% drop in the fourth quarter of last year. It was the highest positive rate for the industry since the third quarter of 2020 (14.7%), when the sector was starting to recover from the effects of the pandemic and had a depreciated basis of comparison. This growth is due to the positive performance of 3.1% in the electricity and gas, water, sewage, waste management activities, 2.7% in construction, 2.2% in extractive industries and 1.7 % in manufacturing industries.
“There was growth in all subsectors of the industry. One of them is civil construction, which has been facing problems for years and was greatly affected by the pandemic, but has been recovering for a few quarters,” says the researcher.
The advance in electricity and gas, water, sewage and waste management activities is explained by the shutdown of thermal plants, which resulted in the end of the water scarcity tariff flag. “At the beginning of the year, there was this shutdown and the increase in the use of renewable energies, which are cheaper”, he points out.
Agriculture, which had retreated 0.9% in the last quarter, changed 0.5% in the second quarter of this year. “This sector is very linked to seasonality. In the first half of the year, agriculture has been falling, driven by the retraction in soybean production, which is our biggest crop. According to the Systematic Survey of Agricultural Production (LSPA), the forecast is for a drop of 12% in this production. This greatly impacted the results of Agriculture in the year”, says Rebeca.
The specialist points out that, in the quarter, the result is related to the lower weight of the soybean crop in the period compared to the previous quarter and the weight gain of the coffee crop, whose production is expected to increase 8.6% compared to that harvested in the year. past.
Household consumption rose the most since the fourth quarter of 2020, growing 2.6% in the second quarter.
Government consumption fell by 0.9%, after registering stability in the previous quarter (-0.1%). “The rise in household consumption is related to the return to growth of services provided to families, as a result of face-to-face services that are with dammed demand in the pandemic. A reflection of this is the increase in the price of airline tickets, a consequence of the growth in demand”, analyzes Rebeca.
“There was also growth in trade, both wholesale and retail, the latter linked to household consumption. Other points are the improvement in the labor market, with growth in the salary mass in the annual comparison, the release of the FGTS emergency withdrawal and the anticipation of the 13th of INSS retirees and pensioners. All of this impacted consumption, despite rising inflation and interest rates,” he says.
Regarding investments (Gross Fixed Capital Formation), there was an increase of 4.8%. “This growth is linked to construction and information and communication activities. In this last activity, positive performance is especially related to the development of software. This is one of the activities that were least impacted by the effects of the pandemic, as well as the financial sector, agriculture and extractive industry”. The investment rate was 18.7% of GDP in the second quarter.
The Brazilian economy also grew a little more at the beginning of 2022 than previously calculated, with an expansion of 1.1% in the first quarter, and it also advanced more towards the end of 2021.
The Brazilian Institute of Geography and Statistics (IBGE) revised the data from January to March after having reported expansion of 1.0% in the Gross Domestic Product (GDP) compared to the previous three months.
The IBGE also adjusted the expansion of activity in the fourth quarter of 2021 upwards over the previous three months, to 0.8%, from 0.7% previously reported.
(with IBGE News Agency and Reuters.)
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