The Gross Domestic Product at market prices increased 4.2% in the first semester of 2004 over the same period of 2003. In the second quarter of 2004, the increase was of 1.5% in relation to the first quarter of the year and of 5.7% over the second quarter of 2003. In the last four quarters, that is, from July 2003 to June 2004, the change was of 1.7% against the immediately previous period.

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The Gross Domestic Product at market prices increased 4.2% in the first semester of 2004 over the same period of 2003. In the second quarter of 2004, the increase was of 1.5% in relation to the first quarter of the year and of 5.7% over the second quarter of 2003. In the last four quarters, that is, from July 2003 to June 2004, the change was of 1.7% against the immediately previous period.

Three sectors grow in the first semester, highlighted by Agriculture

In the first semester of 2004, the GDP at market prices increased 4.2% over the same period of 2003. It was the highest growth recorded in the first semester since 2000, when the GDP rose 4.7%. Considering the same comparison basis, the sectors of Agriculture and Industry increased 5.7% and 4.7%, respectively, and the sector of Services, 2.8%.

Three out of the four subsectors of the industrial sector recorded positive rates in the first semester of 2004, highlighted by Manufacturing (7.3%). Civil Construction and Public Industrial Services grew 2.0% each. Mining and Quarrying posted a negative change of 2.9%.

In the Services sector, the highest rates were registered in Trade and Transportation (7.6% and 6.9%, respectively). The subsectors of Financial Institutions (3.6%), Other Services (2.6%), Public Administration (1.5%) and Rental Services (1.3%) also rose. Communications dropped 1.0%.

Consumption of Households rises 3.1% in the first semester

Comparing the first semester of 2004 against the first semester of 2003, the demand analysis pointed out to a rise of 3.1% in the Consumption of Households and of 6.8% in the Gross Fixed Capital Formation, recording the highest rate in the time series since 2001. Consumption of Public Administration increased 1.4%. Concerning the external sector, Exports of Goods and Services and Imports of Goods and Services posted positive rates of 17.8% and 13.0%, respectively. According to the Fundação Centro de Estudos de Comércio Exterior - Funcex, the improvement of exports was widespread. However, the increase in capital goods and durable consumer goods stood out. As to the imports, fuels and intermediate goods registered the highest rises in this comparison.

GDP increases 1.5% against the first quarter, highlighted by Services

In the seasonally adjusted series, the GDP at market prices increased 1.5% between the first and the second quarter of 2004. In this comparison, Agriculture and Industry remained stable (-0.3% and 0.2%, respectively) and the Services sector grew 2.5%.

Graph I.1 shows the changes against the previous quarter for the GDP at market prices and for its main sectors, considering the last four quarters.

GFCF, which means investments, maintains growth started in second semester of 2003

In regard to demand components, Gross Fixed Capital Formation grew 1.5%, reaffirming the upturn started in the third quarter of 2003, after a first semester of drops above 5.0%. Consumption of Households posted a rate of 1.5% in the second quarter over the first quarter of 2004 and Consumption of Public Administration registered a change of 0.2%. In this comparison, Exports of Goods and Services increased 2.2% and Imports, 1.6%.

Graph I.2 shows the changes against the previous quarter for the demand components, considering the last four quarters.

Rate of 5.7% in relation to the same quarter of the previous year is the highest since the third quarter of 1996

Industry rose 6.6%, Agriculture, 5.0% and Services, 4.4% over the second quarter of 2003. The growth in Services was widespread. After falling by three quarters, Communications changed 0.1%.

The GDP at market prices increased 5.7% in the second quarter of 2004 over the same quarter of 2003. This was the highest figure since the third quarter of 1996, when the quarterly rate reached 6.3%. The Value Added at basic prices rose 5.3% in the second quarter and Taxes over Products, 9.1%. The increase in the volume of taxes over products reflected the behavior of overtaxed sectors like: Electric Material, Electronic Equipment and Cars, which rose above the average.

The three sectors that contributed to the generation of Value Added registered positive rates when compared with the same period last year. Industry rose 6.6%, Agriculture, 5.0% and Services, 4.4%.

The Agriculture rate could be explained by the positive performance of some products whose harvests are relevant in the second semester, as was the the case of coffee in grain and paddy rice. According to the Systematic Survey of Agricultural Production of IBGE, the estimated production growth for these products in 2004 were, respectively, 27.2% and 20.1%.

In the industrial activity, Manufacturing Industry was the subsector that recorded the highest growth rate (8.5%), leveraged by the increased production of the categories of durable goods (highlighted by motor vehicles) and of capital goods (highlighted by machinery and equipment ¹). After falling five quarters in a row, Civil Construction posted an expansion of 6.7%. Public Industrial Services (SIUP) also changed positively, though less intensely (2.7%). Mining and quarrying (-1.9%) was the only industrial subsector that registered a negative rate in the second quarter of 2004, reflecting the performance of oil.

The sector of services recorded a widespread growth. Six out of its seven subsectors posted positive rates. Trade and Transportation rose 9.9% and 6.5%, respectively, as a result of the growth registered in Agriculture and, mainly, in Manufacturing Industry. The other subsectors that recorded positive changes were: Other Services (7.5%), Financial Institutions (5.2%), Renting (1.5%) and Public Administration (1.8%). After registering three consecutive quarters of negative growth rates, the subsector of Communications recorded a rate of 0.1%. The reduced volume of landline telephony and mailing explained the negative value.

Consumption of households rises 5.0% in the second quarter over the same quarter last year

After successive drops in this comparison, Consumption of Households rose for the second time in a row. Also after successive negative results, Gross Fixed Capital Formation posted a growth of 11.7% in the second quarter this year.

Among the demand components, Consumption of Households registered a growth of 5.0% in the second quarter of 2004 over the same quarter in 2003. After recording successive drops in this comparison, this item posted a positive change for the second time in a row. Similarly, Gross Fixed Capital Formation registered successive negative figures along the four quarters last year and recorded a sound growth rate this period (11.7%). Consumption of the Public Administration increased 1.3%.

As to the external demand, Exports of Goods and Services remained growing by recording the rate of 16.5% and reaffirming a growth trend started in the second semester of 2002. Once again, Imports of Goods and Services posted an increase of approximately 14.1% in this comparison, registering the highest value since the first quarter of 2001.

The cumulative rate of the last four quarters reveals Communications dropping and Transportation and Trade with the highest rises

The cumulative GDP at market prices, in the four quarters ended in the second quarter of 2004, changed 1.7% in volume in relation to the four previous quarters. This result was due to the change of 1.6% in the Value Added at basic prices and of 2.3% in the Taxes over Products.

The result of the Value Added (1.6%) was a consequence of the similar behavior of the three sectors that comprise it. Industry and Services rose 1.4% and 1.3%, respectively, while Agriculture grew 3.4%. Among the industrial subsectors, Manufacturing, Public Industrial Services and Mining and Quarrying registered, respectively, the following changes: 3.4%, 1.4% and 0.4%. On the other hand, Civil Construction maintained the negative rate (-4.9%) when comparing the cumulative index in four quarters.

Except for the subsector of Communications, which recorded a negative rate in this type of comparison (-1.7%) for one more period, the other components of the sector of Services posted positive changes. The subsectors of Transportation (3.6%) and Trade (1.9%) registered the highest rises, the latter reverting its rate after four periods of negative figures. Financial Institutions, Rental Services and Other Services changed 1.3%, whereas Public Administration changed 0.9%.

Considering the results under the point of view of the demand, Consumption Expenditure of the Public Administration and Consumption Expenditure of Households changed 1.1% and 0.4%, respectively. The Gross Fixed Capital Formation declined 0.6%. As to the external demand, Exports of Goods and Services rose 12.1% and Imports, 7.2%.

¹In order to obtain more information on the industrial output, please check the Monthly

 Industrial Survey: Physical Production - PIM-PF of IBGE.

Notes: 1- As the information used to calculate the volume indicators of some activities were not available in time for the publication of the Quarterly National Accounts - Volume Indicators, projection models were used to estimate the preliminary figures for the last quarter published. For the second quarter of 2004, figures were estimated for Livestock (cattle, hogs and pigs, eggs, milk and poultry), Rental Services (effective and imputed), Electricity (May and June) and Mobile Telephony.

2-As of October 2000, the quarterly statistics for the Brazilian GDP have been published in two editions. The first, including the volume indicators, is published 60 days after the end of every quarter and the second, 90 days after the end of every quarter, including the revision of the volume indicators previously published and the current values, in reais.

3- Data revision and methodological changes in the Quarterly National Accounts are concentrated in the publication Quarterly National Accounts - Volume Indicators and Current Values for the third quarter of the year.