GDP grows 0.6% in Q3 pushed by services and industry
December 03, 2019 09h00 AM | Last Updated: December 18, 2019 02h37 PM
The national Gross Domestic Product (GDP) grew 0.6% in Q3 2019, against the previous quarter, having reached the same level as in 2012. The rate is still below the highest figure in the series, of Q1 2014, and 4.9% above the lowest figure, of Q4 2016.
Agriculture recorded the largest expansion (1.3%), but the biggest impact on the GDP comes from services, with the highest weight, with an advance by 0.4%. Industry grew 0.8%. Information released today by the IBGE c from the System of Quarterly National Accounts.
In the comparison to the third quarter 2018, it increased 1.2%, the eleventh consecutive high in this comparison base. In terms of cumulative figures in the year, the growth was 1%.
The investment rate in the third quarter 2019 was 16.3% from GDP, the same recorded in the equivalent period in the previous year (16.3%). The saving rate was 13.5% in the third quarter 2019 (against 13.1% in the same period in 2018).
The industry growth is due to the expansion of 12% in the mining and quarrying sector, pushed by the increase in the extraction of petroleum, and of 1.3% in construction. The activities electricity and gas, water, sewage and waste management retreated 0.9%, whereas, manufacturing industries edged down by 1%.
In Services, the positive results were those of financial activities, insurance and related services (1.2%), trade (1.1%), information and communication (1.1%), real estate activities (0.3%) and other service activities (0.1%). Activities that recorded retreat were transportation, storage and mailing (-0.1%) and administration, defense, public health and education and social security (-0.6%).
From the point of view of expenses, the positive changes were recorded in gross fixed capital formation (2%) and by household consumption (0.8%), while government consumption fell 0.4% against the immediately previous quarter.
Regarding the foreign sector, exports of goods and services fell 2.8%, while imports of goods and services grew 2.9% in relation to the second quarter 2019.
“From the perspective of demand, investments have been increasing, pushed by construction, which had fallen for 20 consecutive quarters and since the previous quarter they have recovered, when compared to the same period 2018. Household consumption also grow, while government expenses – including labor force and other expenses, except investments – fell in all spheres due to budget constraints”, says the IBGE’s National Accounts coordinator, Rebeca Palis.
She also highlights that, from the perspective of production, which most grew was construction; the mining and quarrying industry, pushed by oil extraction; and information and communication, with internet advance and system development.
“Among the activities that edged down, the highlight is manufacturing industry, affected by the fall in exports due to global demand and the economic slump in Argentina”, says the IBGE’s National Account coordinator.
GDP grows 1.2% in relation to the third quarter 2018
In the comparison to the third quarter 2018, GDP rose 1.2% with agriculture leading the high with 2.1%. According the Systematic Survey of Agricultural Production (LSPA), released in November by the IBGE, the increase in the estimate of annual corn production (23.2%), upland cotton (39.7%), orange (6.3%) and cassava (3.6%) surpassed the low performance of crops such as coffee (-16.5%) and sugarcane (-1.1%).
Industry grew 1%, pushed mainly by construction (4.4%), the second expansion after twenty consecutive quarters of decreases; and by mining and quarrying industry (4%), resulting from an increase in oil and gas extraction. The activities of electricity and gas, water, sewage, and waste management activity (1.6%) also recorded positive results, favored by tariff flags.
The activities of manufacturing industries fell 0.5%, a result influenced, mainly, by the decrease in the production of pulp, paper and paper products; chemical products; pharmaceuticals and basic metals.
The service sector grew 1% in the comparison to same period previous year, with highlight to information and communication (4.2%) and trade – wholesale and retail – (2.4%). There also were advances in real estate activity (1.9%), financial activities, insurance and related services (1.3%) and other services activities (0.9%). The sectors of administration, defense, public health and education and social security (-0.6%), and transportation, storage and mailing (-1%) recorded negative results.
2018 GDP is revised to 1.3%
In the annual revision, performed regularly in the third quarter, the GDP 2018 changed positively 0.2 pp, from 1.1% to 1.3%. Among the sectors, the biggest change was in agriculture, from 0.1% to 1.4%. This result is due, in most part, to the incorporation of new IBGE’s annual structural sources, not available in the former compilation, as the Municipal Agricultural Production (PAM), the Municipal Livestock Survey (PPM) and the Survey of Forestry Activities (Pevs). Industry had a slight reduction from 0.6% to 0.5% and services changed 0.2 pp from 1.3% to 1.5%.