Brazilian economy grows second year in a row

published: Feb 28, 2019 05:46 PM, last modified: Mar 01, 2019 10:34 PM

The result was mainly driven by the good performance of the service sector

Brazil's Gross Domestic Product (GDP) grew by 1.1% in 2018 in relation to the previous year, reaching R$ 6.8 trillion in the period. This marks the second consecutive year of economic growth after two years of recession. The data was released by the Brazilian Institute of Geography and Statistics (IBGE) on Thursday (28). Growth is back

The result was impacted mainly by the good performance of the service sector, which grew by 1.3% last year. According to the IBGE, all seven main branches of economy activity saw growth, including trade (+ 2.3%) and real estate activities (+ 3.1%).

Other highlights

Last year's GDP was also influenced by the positive results of the agriculture and livestock sectors (up 0.1%) and industry (+0.6%).

According to the survey, this was the first time the industrial sector grew after four consecutive years of contraction. Performance in the sector was driven, among others, by increased activity in electricity and gas, water, sewage and waste management sector (+ 2.3%). In agriculture and livestock, the result is mainly explained by the former, which saw great harvests of coffee, cotton, wheat and soy.

Expectations

The result is in line with the expectations of the financial market and confirms the recovery trajectory of the Brazilian economy after two years of GDP decline.

According to IBGE, consistently low inflation and slight improvement in labor market numbers have contributed to the overall positive performance of economic activity. Financial market expects the Brazilian economy to grow 2.65% this year.