O Gross Domestic Product (PIB) do Brasil registered a slight decline in the second quarter of this year, losing strength from the first three months of 2021 and stabilizing after three straight quarters of gains.
In the second quarter, GDP dropped 0.1% compared to the previous three months, according to data from the Brazilian Institute of Geography and Statistics (IBGE) released this Wednesday. In the first quarter, the Brazilian economy had advanced 1.2%.
The expectation in a survey by Reuters was a growth in the second quarter of 0.2%, in the quarterly comparison.
Compared to the second quarter of 2020, GDP expanded by 12.4%, compared to an expected increase of 12.8% on this basis of comparison.
“We maintain our GDP forecast around 5% for the end of the year, it is enough to grow 0.5% per quarter to reach this result. However, it is worth noting that if we observe the growth in the year itself, the expected variation for the end of this year is not 5%, but close to 2%,” stated André Perfeito, chief economist at Necton Investimentos.
On the supply side, agriculture and industry had a negative result compared to the first quarter of 2021: there was a decrease of 2.8% and 0.2%, respectively. Services advanced 0.7% in the period.
Industrial activity also retreated due to falls of 2.2% in the manufacturing industries and 0.9% in the activity of electricity and gas, water, sewage, waste management activities.
From the perspective of demand, only government consumption increased, with growth of 0.7%. Household consumption did not change in the period (0.0%) and investments, which rose 4.6% in the first quarter, dropped 3.6%.
Analysts assess that the advance of the vaccination campaign, added to the reduction of restrictions on mobility, tends to open space for the recovery of segments of the service sector, which are still below the pre-pandemic. Services account for about 70% of GDP.
On the other hand, it weighs against high inflation, which reached 8.99% in 12 months, eroding Brazilians’ income and impacting household consumption. The increase in the basic interest rate, the Selic – currently at 5.25% per year – also increases the cost of credit for individuals and companies.
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