Brazil Economy Grew 7.5 Percent Between Q2 and Q3, Says GDP Monitor

RIO DE JANEIRO, BRAZIL – The Gross Domestic Product (GDP), the sum of all goods and services produced in the country, grew by 7.5 percent in Q3 this year compared to Q2. The data is from the Getulio Vargas Foundation (FGV) GDP Monitor, released yesterday, November 19th.

“The strong 7.5 percent growth of the Brazilian economy in Q3, partly offsets the sharp 9.7 percent retraction recorded in Q2 this year, due to the outbreak of the Covid-19 pandemic in Brazil in March. However, this growth is not enough to recover the level of economic activity which is still five percent below that observed in Q4 last year,” says Claudio Considera, research coordinator.

According to him, although the recovery is spread among business activities, the service sector is still struggling to recover. Services recorded a 5.5 percent increase, well below industry’s 13.4 percent.

“Despite the flexibility of isolation measures and a small marginal improvement in the sectors of housing, food, services to families, education and health, the growth observed is still very low compared to the deterioration caused by the pandemic, observed in these segments. The high uncertainty regarding the future of the pandemic has inhibited a more robust rebound in the services sector, which is the Brazilian economy’s most relevant activity,” he explains.

Agriculture and cattle raising retreated 0.3 percent. From the demand perspective, there were increases of 9.9 percent in family consumption and 16.5 percent in gross fixed capital formation (investments). Government consumption grew by 0.5 percent. Exports and imports dropped by 0.6 and 8.8 percent, respectively.

Other comparisons

Despite the 7.5 percent increase in comparison to Q2, there was a 4.4 percent drop in comparison to Q3 2019. Analyzing only the month of September, there was an increase of 1.1 percent compared to August and of 2.3 percent compared to September last year.

When compared to Q2 this year, household consumption dropped by 5.1 percent, while gross fixed capital formation (investment) fell by 2.2 percent. Exports grew by 1.7 percent, while imports suffered a 24.4 percent drop.

Source: Agência Brasil