Brazil GDP Growth Beats Expectations in Q2


The Brazilian economy advanced 0.2 percent on quarter in the second quarter of 2017, following a 1 percent growth in the previous period and beating market expectations of a 0.1 percent expansion. Household spending increased for the first time in 2-1/2-years while government spending declined more and investment continued to fall.

Household spending jumped 1.4 percent, the first gain since the last quarter of 2014 and the biggest since the first three months of 2014 amid a slowdown in inflation, lower interest rates and higher real wages. On the other hand, public spending fell 0.9 percent, following a 0.7 percent decline in the previous period and marking the fourth straight quarter of declines. Gross fixed capital formation went down 0.7 percent, following a 0.9 percent drop in the previous period and also the fourth straight decline. Exports rose a meager 0.5 percent, following a 5.2 percent jump in the previous period. Imports contracted 3.5 percent, following a 0.6 percent gain. 

On the production side, services drove the expansion (0.6 percent compared to 0.2 percent in Q1), namely internal trade (1.9 percent compared to -0.2 percent), real estate (0.8 percent compared to 0.2 percent) and transport (0.6 percent compared to 3.1 percent). On the other hand, agriculture stalled (+11.5 percent in Q1) and the industrial sector came back to contraction (-0.5 percent compared to 0.7 percent in Q1). Construction slumped 2 percent (-0.5 percent in Q1) and utilities declined 1.3 percent (+3.1 percent in Q1). In addition, manufacturing rose a meager 0.1 percent (1.1 percent in Q1) and mining growth slowed to 0.4 percent (1.8 percent).

Year-on-year, the economy advanced 0.3 percent, first expansion since the first quarter of 2014, following a 0.4 percent contraction in the previous period.


Brazil GDP Growth Beats Expectations in Q2


IBGE | Joana Taborda | joana.taborda@tradingeconomics.com
9/6/2017 3:05:29 PM