Brazil's economy accelerates to 4pc growth in 3Q

Spanish Market: Agriculture, Crude oil, Electricity, Metals, Natural gas
04/12/24

Brazil's economic growth accelerated to an annual 4pc in the third quarter, led by stronger consumer spending, according to government statistics agency IBGE.

The economy accelerated from 3.3pc annual growth in the second quarter and posted the fastest growth since the first quarter of 2023.

Household consumption grew by 5.5pc in the third quarter from a year earlier, while government spending increased by 1.3pc. Services grew by 4.1pc.

The industry sector grew by an annual 3.6pc, driven by civil construction and five-year high automotive production in July, according to the national association of vehicle manufacturers.

Exports rose by 2.1pc, while imports grew by 18pc.

The oil, natural gas and mining industry contracted by 1pc, thanks to lower oil and gas exploration and production. Brazil produced 4.35mn b/d of oil equivalent (boe/d) in the third quarter, down from 4.51mn boe/d in the July-September 2023, according to oil and gas regulator ANP.

The electricity and gas, water and sewage management sector increased by 3.7pc from July-September 2023, favoured by higher demand despite higher power tariffs. Brazil faced a severe drought in the first two quarters of the year that lowered river levels at hydroelectric plants and increased power charges in September.

But the agriculture and cattle raising sector fell by 0.8pc, with expected production of significant crops such as corn and sugarcane dropping from a year prior also because of adverse weather. Still, output of cotton, wheat and coffee increased by 14.5pc, 5.3pc and 0.3pc, respectively, according to IBGE.

The investment rate — the percentage of a country's total production that is invested — grew to 17.6pc in the third quarter, an increase of 1.2 percentage points from the same period in 2023.

Brazil's GDP growth in the third quarter was up by 0.9pc from the second quarter, reaching R3 trillion ($494bn).

By Maria Frazatto

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