2023 saw Brazil’s industrial output barely move, with just a 0.2% rise. This small upturn follows a 0.7% dip in 2022.
The Brazilian stats agency IBGE shared these findings on February 2, 2024. Despite the overall stagnation, this is an improvement from the previous year.
Growth occurred in several areas. Semi and non-durable goods went up by 2.1%. Durable goods saw a 1.2% rise.
Intermediate goods increased by 0.4%. Yet, capital goods fell sharply by 11.1%. Some sectors did well. Extractive industries grew 7%.
The coke, petroleum, and biofuels sector increased by 6.1%. Food products rose by 3.7%. But, 16 sectors saw declines.
The most affected were automotive (-7.1%), chemicals (-5.9%), machinery (-7.2%), electrical devices (-10.1%), and electronics (-11.0%).
December brought a surprise boost. Industrial output grew 1.1%, against a predicted 0.5% fall.
This was the month’s best performance since a 1.3% increase in 2021. It hints at a potential positive change for the sector.
Background
This trend reflects broader economic challenges. Brazil’s industrial stagnation underscores the need for structural reforms.
Such reforms could spark growth and make the industry more competitive.
Two weeks ago, Brazil’s President Lula introduced ‘Nova Indústria Brasil’ (NIB), a policy to revitalize the nation’s industry.
This initiative includes a significant R$300 billion (approximately $60.6 billion at an exchange rate of 4.95) in financing for the industrial sector, aiming for completion by 2026.
Of this R$300 billion, R$ 106 billion (around $21.41 billion) had already been announced in July 2023.
The National Council for Industrial Development (CNDI), under Vice President Geraldo Alckmin, endorsed this plan.
Developed with inputs from CNDI members over a year, it combats deindustrialization and aims to boost exports of high-tech products.
The NIB sets ambitious targets. It seeks to raise the agro-industrial sector’s GDP contribution to 50% and mechanize 70% of family farming using local machinery.
Additionally, the plan includes producing 70% of national health necessities, like medicines and medical devices, domestically.
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