The Brazilian Gross Domestic Product (GDP) remained stable (0.1%) between the second and the third quarter. After changing -0.1% in the last three months last year, this is the third positive rate in a row. As a result, the GDP, which is the sum of final goods and services produced in Brazil, is once again at the highest level in the time series, 7.2% above the pre-pandemic level, registered in the fourth quarter of 2019. At current values, R$2.741 trillion were produced in the third quarter. Between January and September, the GDP accumulated a rise of 3.2% compared with the same period a year ago. The data are from the System of Quarterly National Accounts, released today (5) by the IBGE.

This publication includes the final annual results of 2021, as well as the revisions of the time series of the Quarterly National Accounts related to all the quarters last year and to the first two quarters this year. “With this revision, the annual result of 2022 changed +0.1%, mainly explained by the change in the weights of the System of National Accounts. On the other hand, the revisions of the first and second quarters of 2023 were more related to agriculture, because we now incorporated the November estimates of the LSPA,” explains Rebeca Palis, the IBGE´s Coordinator of National Accounts.

Two out of three major economic sectors advanced in the quarter: Industry (0.6%) and Services (0.6%). “Looking inside the services sector, the major highlights are financial activities, insurance and related services (1.3%), especially insurance, and real estate companies (1.3%), with the increase in the number of households,” highlights Palis.

Of the seven activities analyzed in the services sector, six stayed on the positive side. The highest percentage increases came from the two activities mentioned by the researcher, followed by the segment of Information and communication (1.0%). The other positive changes came from other services activities (0.5%), administration, defense, public health and education, and social security (0.4%) and trade (0.3%).

In contrast, the sector of transportation, storage and mailing retreated 0.9%. “This drop comes after eight quarters of rises and it is related to the transportation of passengers,” says the coordinator of National Accounts. As a whole, the services sector represents nearly 67% of the economy.

Among the industrial activities, the only growth was registered by the sector of electricity and gas, water, sewerage and waste management (3.6%), influenced by the growth in the consumption of energy. “It is being a good year for the sector, without water problems and with a green tariff flag. It was very hot as well, which favored the consumption of electricity and water,” analyzes Palis.

On the other hand, mining and quarrying industries (0.1%) and manufacturing industries (0.1%) remained stable. In the same comparison, construction (-3.8%) was the only industrial activity to drop in the quarter. “This activity grew along the two previous years, though 2023 is not being a good year for the production of typical inputs and trade of construction material, due to high interest rates and a dropping employment,” says her. In the cumulative index in the year, construction retreated 0.9% against the same period in the previous year.

Agriculture fell 3.3% in the quarter. According to the data revised in the publication, it was the first drop in the activity after five quarters with positive rates. “Agriculture hit its highest level in the previous quarter and this one marks the absence of the soybean harvest, the biggest Brazilian crop, which is concentrated in the first semester. So it compares a quarter in which soybeans have a big weight with another in which it weights next to nothing. Therefore, this drop was expected, though it is being a good year for the activity, which is accumulating a rise of 18.1% up to the third quarter,” assesses the researcher.

Under the point of view of the demand, investments (Gross Fixed Capital Formation) dropped 2.5% over the second quarter. It was the fourth consecutive drop of this indicator. “It is a reflection of the restrictive monetary policy, with drops in construction and also in the production and imports of capital goods. All the components that mostly weight on investments dropped this quarter,” analyzes Palis.

In the same comparison, Household consumption expenditure increased 1.1% and that of Government, 0.5%. “The growth in the consumption of families is explained by some factors like governmental programs of cash transfer, the continuous improvement of the labor market, lower inflation and credit growth. Although they began to decrease, interest rates remain high and families remain indebted. The consumption of durable goods dropped as well,” highlights the coordinator.

GDP grows 2.0% against the same period last year

When the comparison is made with the same quarter of 2022, the GDP grew 2.0%, impacted by positive results of the three major sectors. In this period, agriculture advanced 8.8%, with the increase in the estimates of some crops that have a relevant harvest in the third quarter, like corn, sugarcane, upland cotton and coffee, as well as of livestock.

In industry, the rise was of 1.0% against the third quarter last year. Also in this comparison, the biggest positive change came from the activity of electricity and gas, water, sewerage and waste management (7.3%), with the impact of a higher consumption of electricity in the year. Mining and quarrying industries (7.2%) rose, whereas construction activities (-4.5%) and manufacturing industries (-1.5%) dropped.

On the other hand, services, the sector with the highest weight in the GDP, advanced 1.8% in the comparison with the same quarter a year ago. All its activities remained on the positive side: financial activities, insurance and related services (7.0%), real estate activities (3.6%), information and communication (1.6%), transportation, storage and mailing (1.6%), other services activities (1.1%), trade (0.7%) and administration, defense, public health and education, and social security (0.4%).

About the System of National Accounts

The System of National Accounts shows, on a quarterly basis, the current values and the volume indexes for the Gross Domestic Product (GDP) at market prices, taxes on products, value added at basic prices, personal consumption, government consumption, gross fixed capital formation, stock changes, and exports and imports of goods and services. The survey began in 1988 at the IBGE and it was redesigned in 1998, when its results were integrated to the System of National Accounts, which has an annual periodicity.