The Gross Domestic Product, measured at market prices, of Q3 2004 was R$ 457,736 million, out of which R$ 410,139 million were relative to Value Added at basic prices and R$ 47,597 million to Taxes on Products. Thus, the cumulative GDP in the three quarters of 2004 was R$ 1,289,450 million. The net lending of the National Economy accumulated, in 2004, R$ 30.3 billion up to the third quarter.

Among the components of demand, Household Expenditure amouunted to R$ 250.097 million. Gross Fixed Capital Formation, to R$ 96,158 million and Government Expenditure, to R$ 82,222 million in Q3 of the year. The Balance of Goods and Services had surplus of R$ 24,892 million (R$ 88,740 million exports and R$ 63,848 million imports), and the Change of Stocks was R$ 4,368 million.

Net lending in the country grows in all comparisons

The difference between transfers received and sent to the rest of the world was positive, that is, Net Lending of the National Economy was R$ 15.6 billion in the 3rd quarter of 2004 – with increase of R$ 6 billion in relation to Q3 2003, when Net Lending had been R$ 9.6 billion. This increase occurred mainly due to the change of R$ 5.9 billion of Current External Ba

lance, caused by the rise of the Eternal Balance of Goods and Services, which changed from surplus of R$ 16.7 billion in Q3 2003, to R$ 24.9 billion in Q3 2004. In terms of the cumulative figure in the year, Net Lending, which reached R$ 30.3 billion versis R$ 10.6 billion in Q3 2003, was also affected by the higher External Balnace of Goods and Services, at a total R$ 23.3 billion.

Gross National Income reached R$ 445.6 billion in the third quarter of 2004, versus R$ 386.7 billion in the same period of 2003. On the same basis for comparison, Gross Savings, which is the available part of gross disposable income not spent in the final expenditure, reached R$ 115.6 billion in 2004, versus R$ 89.7 billion in 2003.

Tables VI.I and VI.II present Quarterly Nationl Accounts and Transactions of the Rest of the World with the National Economy in Q3 2003 and 2004.

Financial Account

Foreign direct investment (FDI) increases from R$ 8.7 billion to R$ 25 billion.

In the quarter, the government issued bonus shares to the foreign market amounting to approximately R$ 2.3 billion. The private sector issued bonus shares amounting to R$ 289.1 million. Foreign direct investment (IED)¹ recorded significant increase between Q3 2003 and Q3 2004, having changed from R$ 8.7 billion to R$ 25 billion in the period. The main influence accounting for the FDI increase was the participation in capital, which reached a total US$ 6 billion in August 2004.

The data in table VI.3 show that, considering transaction relative to agreements with the IMF in the 3^rd quarter of 2004, the National Economy had positive net inflow of R$ 7.3 billion, versus positive net inflow of R$ 5.2 billion in the same quarter of 2003. In the Q3 2004, the country had a disbursement of about R$ 2.0 million relative to amortizations with IMF and recorded decrease of international reserves of about R$ 2.2 billion, versus growth of reserves by R$ 12.3 billion in Q3 2003.

Table VI.4 shows that, without the accounting of transactions with the IMF, the country would have positive net inflow of R$ 9.3 billion and reduction of international reserves by R$ 185 million in Q3 2004, versus accumulation of reserves of about R$ 3.9 billion in Q3 2003.

In relation to asset changes, the financial instrument Currency and deposits (F.2) changed from a positive net investment of R$ 16.1 billion in Q3 2003, to a negative net investment of R$ 22.1 billion (see Table VI.5, attached).

This result was mainly influenced by the reduction of investments of reserves as deposits, which changed from a net positive investment of R$ 12.1 billion to a negative net investment of 23.1 billion.

As for assets of Brazilians abroad, the highlight is the significant increase of investments in Securities other than Shares (F.3), which changed from R$ 395 million in Q3 2003 to R$ 19.4 billion in the same period of 2004. This increase was influenced by investments of reserves as bonuses and notes. This change was influenced by the investment of reserves as bonuses and notes.

With reference to changes in liabilities, the financial instrument Securities other than shares (F.3) recorded negative net inflow of R$ 2.7 billion in Q3 2004, versus negative net inflow of R$ 3.9 billion in Q3 2003. The result of the 3rd quarter of 2004 was a consequence of the recovery of notes and commercial papers by R$ 9.3 billion in the quarter.

The financial instrument Loans (F.4) recorded negative net inflow of R$ 9.8 billion, versus positive net inflow of R$ 85 million in Q3 2003. This change resulted from the process of amortizations, more intense since the Q2 2003. In the third quarter of this year, amortizations in F.4 amounted to R$ 13.7 billion, and, out of this total, R$ 2.0 billion refer to amortizations of the International Monetary Fund (IMF) and R$ 3.9 billion of International Agencies and Organisms. Except for the regularizatiom of the Balance of Payments - agreements with the IMF - net inflows in Loans (F.4) were negative by R$ 7.7 billion in Q3 2004. In Q3 2003, these inflows were negative by R$ 8.3 billion. 

In Q3 2004, the financial instrument Shares and other equity capital (F.5)² had positive net inflow of R$ 25.8 billion, versus R$ 10.3 billion in Q3 2003. The highlight in the change of F.5 was the increase of participation in capital (Foreign Direct Investment - FDI), which had previously recorded positive net inflow of R$ 8 billion, in Q3 2003, and now in Q3 2004 has positive net inflow of R$ 26.2 billion. In relation to assets of Brazilians living abroad it was observed there was significant increase of investments through F.5, with a change from a negative net inflow of almost R$ 1.6 billion to a positive inflow of R$ 15.9 billion. This increase was influenced by the participation in capital (Foreign Direct Investment), which changed from a negative net inflow of R$ 1.8 billion in Q3 2003 to positive net inflow of R$ 15.8 billion in Q3 2004.

The instrument Other Debts - receivable and payable (F.7) recorded, in the third quarter of 2004, negative net inflow of R$ 6.6 billion, versus negative net inflow of R$ 1.7 billion in Q3 2003. This way, the highlight was the change in the behavior of F.79 (Other accounts), with change from a positive net inflow of R$ 708 million to negative net inflow of R$ 3.0 billion between the quarters. In relation to active changes of this instrument, the highlight was the increase of investments in F.7: from R$ 544 million in Q3 2003 to R$ 8.2 billion in Q3 2004. This result came from the increase of assets in F.79 (Other debts), mainly due to loans from Brazilian companies with branches abroad, which reached R$ 8.3 billion in Q3 2004, versus the amount of R$ 628 million of Q3 2003.

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¹ Includes Capital Participation and Loand between Companies.

² Includes Participation in Capital and Shares.