Brazil Economy Grows 2.1% in Q4


The Brazilian economy grew by 2.1 percent year-on-year in the fourth quarter of 2017 following an expansion of 1.4 percent in the previous three-month period, but missing market expectations of 2.5 percent.

From the expenditure side, household expenditure grew by 2.6 percent (vs 2.2 percent in Q3) and fixed investment advanced by 3.8 percent (vs -0.5 percent in Q3). Also, net external demand contributed positively to GDP growth, as exports jumped by 9.1 percent (vs 7.6 percent in Q3) and imports increased at a slower 8.1 percent percent (vs 5.7 percent in Q3). On the other hand, government spending continued to contract (-0.4 percent vs -0.6 percent in Q3).

From the production side, the service industries grew by 1.7 percent following a 1 percent gain in Q3, as output rose for: trade (4.4 percent vs 3.8 percent in Q3); transport and storage (4.4 percent vs 1.9 percent); information and communication (1.5 percent vs -3 percent); financial, insurance and related services (0.3 percent vs no growth in Q3); real estate activities (2.1 percent, the same as in Q3); and public health, education and social security (0.3 percent vs -0.8 percent). Also, industrial output increased by 2.7 percent (vs 0.4 percent in Q3), as manufacturing output expanded 6 percent (vs 2.4 percent in Q3). Meanwhile, a contraction was seen in construction (-1.6 percent vs -4.7 percent) and mining (-0.1 percent vs 2.4 percent) while utilities output showed no growth. Agriculture advanced 6.1 percent after a 9.1 percent jump in Q3.

Considering 2017 as a whole, the GDP rose by 1 percent, following two consecutive years of contraction. It was the strongest growth rate since 2013. Household spending went up 1 percent (-4.3 percent in 2016), the first increase since 2014; exports rose 5.2 percent (1.9 percent in 2016), the most since 2015, mainly boosted by products of agriculture, oil and gas, automotive industry and machinery and equipment; imports grew 5 percent (-10.2 percent in 2016), the first increase in 4 years amid purchases of petroleum refining, electronic materials and communication and clothing. On the other hand, gross fixed capital formation slumped for the fourth year (-1.8 percent compared to -10.3 percent in 2016), dragged down by a 5.6 percent decline in construction that offset a 3 percent gain in machinery and equipment. Public expenditure declined for the third consecutive year (-0.6 percent compared to -0.1 percent in 2016).

Brazil Economy Grows 2.1% in Q4


IBGE | Joana Ferreira | joana.ferreira@tradingeconomics.com
3/1/2018 1:27:27 PM