Brazil's GDP grows 1.4% in second quarter, exceeding expectations

On Tuesday morning (Sept. 3), the government´s statistics agency IBGE announced that the Gross Domestic Product (GDP) grew by 1.4 percent in the second quarter of this year compared to the first quarter. This represents the sum of all wealth produced in the country.

Compared to the second quarter of 2023, the economy grew by 3.3 percent. The standout performer between April and June this year was the industrial sector, which increased by 1.8 percent from the first to the second quarter. This was followed by the services sector, which saw a 1 percent growth.

Agriculture declined by 2.3 percent between the first and second quarters of 2024 and by 2.9 percent compared to the same period in 2023. With Tuesday's announcement, the GDP for this year totals BRL 2.9 trillion, comprising BRL 2.5 trillion in Value Added at basic prices and BRL 387.6 billion in taxes on products. The investment rate in the second quarter, reflecting the economy's strong performance, stood at 16.8 percent of GDP, up from 16.4 percent in the same quarter of 2023.

The strong performance in industry was driven by significant gains in the electricity and gas, water, sewage, and waste management sectors, which rose by 4.2 percent. This was followed by construction, which grew by 3.5 percent, and manufacturing, which increased by 1.8 percent. However, the extractive industries experienced a 4.4 percent decline in the second quarter compared to the first.

Services

In the services sector, financial, insurance, and related services grew by 2 percent, while information and communication technology increased by 1.7 percent. Trade saw a 1.4 percent rise, followed by transport, storage, and mail, which grew by 1.3 percent. Administration, defense, public health, education, and social security each grew by 1 percent, real estate activities rose by 0.9 percent, and other trade activities increased by 0.8 percent.

In the external sector, the IBGE reported a 1.4 percent increase in exports of goods and services in the second quarter compared to the first. Meanwhile, imports of goods and services rose by 7.6 percent over the same period.

Recovery

Felipe Queiroz, chief economist at the São Paulo Supermarket Association (Apas), praised the results, noting that they surpassed market expectations. “The Brazilian economy has shown growth, primarily driven by the supply side, particularly in the industry sector, which has experienced a significant and robust recovery. This improvement is partly due to the exchange rate providing some protection for our local industry against international competitors, as well as growth in the services sector,” he stated.