IBGE releases GDP data for the second quarter this Wednesday

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The Brazilian Institute of Geography and Statistics (IBGE) releases this Wednesday, 1, the Gross Domestic Product data (START) of the second quarter of this year. The expectation is that the growth of Brazilian economy is 0.2% compared to the immediately preceding period.

The data shows a slowdown in the quarterly comparison, after the 1.2% rise in the first quarter surprised the market. Other indicators, however, point out that in June, Brazilian economic activity picked up again.

The Central Bank informed on August 13 that its Activity Index (IBC-Br), GDP flag, rose 1.14% in June compared to May, in the series already free of seasonal influences. In May, the indicator had retraction of 0.55% (revised data).

“It’s important to remember that in April we had a new wave of covid-19 and, even so, the economic recovery was very strong and resilient,” says Gabriel Barros, chief economist at RPS Capital, who estimates a GDP advance of 5, 5% for 2021. “The advance of vaccination is allowing a reopening of the economy, which will translate into a higher GDP.”

Job market

Employment level indicators also point to an improvement in the scenario. The labor market in Brazil shows “an initial process of recovery” from the shock caused by the health crisis, assessed Adriana Beringuy, an analyst at the IBGE’s Coordination of Labor and Income. The improvement is driven by the advance of population vaccination against covid-19, the researcher points out.

The unemployment rate dropped from 14.7% in the first quarter to 14.1% in the second quarter of the year, according to data from the Continuous National Household Sample Survey (Pnad Contínua) released by the IBGE on Tuesday, 31.

“A factor that works very favorably for the recovery of the labor market is the expansion of vaccination. In many cities in Brazil, you have the first dose in people aged 18. So the advance of vaccination is very important for the resumption,” said Adriana Beringuy.

“But we know that it doesn’t just depend on the advance of vaccination. There are other factors that operate decisively for the recovery of the labor market, which is a market that responds to economic stimuli.”

For Adriana, the recovery of employment to pre-pandemic levels will depend on the performance of economic activity and the impact of inflation on the purchasing power of families.

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