In the first quarter of 2006, the Gross Domestic Product at market prices was R$478,9 billion, with R$ 424,6 billion relative to Value Added at basic prices and R$ 54,2 billion to Excise Tax. Among the components of Value Added, Agriculture reached R$ 34,7 billion, Industry, R$168,5 billion and Services, R$ 248,3 billion.

Considering the components of demand, in the first quarter, the total Family Consumption was R$ 277,8 billion; Government Consumption, R$ 84,5 billion; Gross Formation of Fixed Capital, R$ 97,6 billion. The Balance of Goods and Services had a surplus of R$ 16,0 billion (R$ 74,8 billion for exports and R$ 58,7 billion for imports). The Stock Change was R$ 2,8 billion.    

Table II.I - Components of GDP in terms of Production and Expenses

The investment rate in the first quarter of 2006 was equivalent to 20.4% of the GDP. In comparison with the same period in the previous year, this rate increased by 0.4 percentage points. The savings rate reached 21.6% of the GDP, a reduction of 0.7 percentage points in relation to the same quarter of 2005. The investment rate, in comparison with the same quarter, was the highest since 2001 (20.6%). The graph below shows the evolution of these rates as GDP percentages in the first quarter of each year, in the period 1995 – 2006.

Net lending was reduced by R$ 3,7 billion in comparison with the first quarter of 2005

National Net Lending was R$ 3,6 billion in the first quarter of 2006, that is, there was decrease of R$ 3,7 billion in relation to the same period of 2005 (Net Lending of R$ 7,2 billion). This reduction was mainly caused by the change in the Foreign Current Balance (R$ - 3,6 billion), a consequence of the reduction of the Foreign Balance of Goods and Services, which went from a surplus of R$ 18,2 billion, in the first quarter of 2005, to R$ 16,0 billion, in the same period of 2006. In the same period, Property Income sent to the rest of the world changed from R$ 13,9 billion to R$ 15,1 billion. This increase of R$ 1,2 billion in the property sales is explained by the increase, by R$ 1,7 billion, of the sending of profits and dividends to other countries. Another important factor is the reduction, by 0,5 billion, of the paying of interest in comparison with the first quarter of 2006, versus the same period in 2005.

Gross National Income reached R$ 463,9 billion in the first quarter of 2006 versus R$ 424,5 billion in the same period of 2005. On the same basis of comparison, Gross Savings reached R$ 103,6 billion in 2006, representing an increment of R$ 5,6 billion when compared to the first quarter of 2005 (R$ 98,1 billion).

 Financial Accounts: net investments increase by R$ 34,1 billion in the first quarter of 2006

 In the first quarter of 2006, the National Economy had increase in the variation of assets¹ – which changed from R$ 30,1 billion of positive net investments in the first quarter of 2005, to R$ 34,1 billion in the same period of 2006. In terms of variation of assets, the positive net borrowing changed R$22,9 billion to R$ 30,2 billion, in the same period of comparison.

In the quarter, the factor affecting the increase of net borrowing, in relation to the first quarter of 2005, was the increase of resources for Commercial and Forward Credits (F.71), with positive net borrowing  of R$ 7,8 billion in the quarter, versus R$ 739 million in the same period of 2005.

Amortizations and purchase of securities contribute to fall of long-term borrowing

It is worth pointing out that the total net borrowing for Securities except Shares (F.3) changed by less than R$1,0 billion – from R$ 8,6 billion to R$ 7,7 billion in the first quarter of 2006. However, there was significant change in the composition of these quarterly total amounts, on both long and short term bases. The net borrowing from securities except short –term shares (F.31) changed from R$ 622 million in the first quarter of 2005, to R$ 3,8 billion in the same period of 2006.

On the other hand, the net borrowing from Securities except long-term shares (F.32) changed from a positive R$ 7,9 billion to R$ 3,9 billion, in the same period of comparison. This way, there was a rearrangement of borrowing through F.3, by increasing the resources obtained on a short-term basis and reducing those on long-term. The reduction of ther latter occurred mainly due to the increase of amortization from bonuses negotiated out of the country. However, these occurred together with the increase of resources – obtained through long-term fixed income securities.

With reference to Loans and Financing (F.4), there was not relevant change in the total of net borrwoing – R$ 2,0 billion (negative) to R$ 1,9 billion (also negative) in the first quarter of 2006. Nevertheless, there was reduction of borrowing from F.41 (Short-term Loans and Financing), from R$ 4,6 billion (positive) in the first quarter of 2005, to R$ 2,2 billion (negative) in the fisrt quarter of 2006. In relation to F.42 (Long-term Loans and Financing), the change was from negative net borrowing of R$ 6,6 billion to a positive net borrowing of R$ 265 milllion, in the same period.

The increase of net borrowing from F.42, in the period,  was caused by the reduction of amortizations, especially of those related to IMF loans; in this specific case there was not amortization paid in the quarter. Besides this fall, there was also increase of long-term loans and financing, from R$ 3,7 billion to R$ 7,4 billion in the period.

In relation to the increased variation of assets in the quarter, the highlight is the occurrence of more net investments in F.3 (Securities except shares) and in F.5 (Shares and other capital participation). The net investments in F.3 were negative by R$ 3,5 billion in the first quarter of 2005, changing to a positive net investment of R$ 6,2 billion in the same quarter of 2006. A big contribution to this change was the increase of F.32 (Securities except long-term shares), which changed from a negative net investment of R$ 7,1 billion to a positive net investment of R$ 6,5 billion. The highlight in this case was the growth of investments in International Reserves under the form of Bonuses and Notes. In relation to F5, the net investment changed from R$ 2,5 billion to R$ 5,8 billion, in the same period and the main factor accounting for that was the increase of the Direct Brazilian Investment (IBD), under the form of capital participation.

International Reserves increase less than in the first quarter of 2005

Considering all the transactions relative to agreements with the IMF, the National economy had increase by R$ 12,8 billion in its international reserves in the first quarter of 2006, compared to the increase by R$ 27,6 billion in the same quarter last year. Except for the transactions with the Monetary Fund, there was increase of reserves, also by R$ 12,8 billion, versus an amount of R$ 30,7 billion in the first quarter of 2005. It can be noticed that in the first quarter of 2006, the increase of International Reserves, with or without considering transactions with the IMF was the same. An explanation to this is the inexistence of transactions with the Monetary Fund this quarter, in terms of either disbursement or amortization. 

_______________________________________________________

¹ Excluding assets reserves variation