In 2008, the Brazilian economy recorded a 5.2% growth in volume of Gross Domestic Product (GDP), versus the figure in the previous year. In current values, the result was R$ 3,032 billion and the GDP deflator (average price change in relation to prices in the previous period) was 8.3%. In the same year, GDP per capita reached R$ 15,989.75, what represented a change of 4.1% in volume compared to the figure recorded in 2007. These and other significant results are present in the System of Accounts - Brazil - 2004-2008.

 

In the first three quarters of 2008, GDP recorded growth rates, but there was, however, significant deceleration in the fourth quarter. The world economy, in 2008, recorded increase of GDP volume by 3.0% compared to the figure in the previous year. Between 2004 and 2007, the annual average increase was 4.9%.

 

GDP may be measured according to three different types of components:

 

a) production – gross value of production, at basic prices, minus intermediate consumption, plus net taxes on products;

 

b) demand – household consumption expenditure, plus government consumption expenditure, plus non-profit institutions at the service of households consumption expenditure (final consumption), plus gross fixed capital formation, plus variation of stocks, plus exports of goods and services, minus imports of goods and services. It allows the analysis according to the destination of goods and services made available for final use.  

 

c) income – compensation received by workers, plus total net taxes on products and imports, plus gross mixed income (compensation received by owners of unincorporated enterprises – self-employed workers – that cannot be identified separately from capital and work), plus the exceeding net operating revenue (balance originating from value added deducted from compensation paid to workers,  mixed income and net taxes on production).

 

Production components: agriculture has recorded the biggest increase (6.1%)

 

The growth of GDP in 2008, 5.2%, resulted from a 4.8% rise of gross value added (VAB) and of a 7.6% rise of excise tax.

 

Agriculture – The gross value added of agriculture increased by 6.1% in volume in relation to year 2007; that is mainly a consequence of the performance of crops in 2008. The change in terms of participation in the gross value added of economy (from 5.6%, in 2007, to 5.9%, in 2008) resulted from the 12.7% rise of value added and from the increased volume of this activity.

 

Agriculture, silviculture and extractive agriculture increased 7.3%, being above the average of economy in 2008. According to the Municipal Agricultural Production 2008, the main products with significant increase in production volume were wheat grain (46.5%), coffee grain (24.4%), sugarcane (17.4%), corn grain (13.1%) and rice (9.0%).

 

The activity livestock and fishing also contributed positively to the performance of agriculture. The 3.6% increase surpassed the result of 2007 (1.0%). According to the 2008 edition of Municipal Livestock Survey, the highlights were poultry and hogs and pigs, with changes of 6.6% and 2.4%, respectively, over the figures recorded in the previous year. As for cattle, the least relevant product in livestock, there was a 1.3% increase, after two consecutive years with negative changes.

 

Industry – The value added of manufacturing industry increased 3.0% in 2008, with expansion of 23 activities (versus 28 in 2007) and decrease in 11 activities (versus 6 in 2007). The growth of industry in 2008 was also more concentrated, with only three activities (machinery and equipment, other transportation equipment and pharmaceutical products), having accounted for more than 50.0% of the increase of value added in manufacturing industries, versus six activities, for the same percentage, in 2007.

 

Among the activities with positive performance, the highlights were those related to gross fixed capital formation (GFCF, the same as investments), which increased 13.6% in the year. Manufacture of railroad vehicles (54.4%) manufacture of trucks and buses (15.5%) and manufacture of machinery and equipment (9.3%) were affected ones in positive terms, due to the rise of investments.

 

The expansion of civil construction (7.9%) also had a positive impact on the activities paint and varnish (12.0%), cement (10.1%) and other non-metallic mineral products (5.5%). On the other hand, among the activities with decrease in 2008, the highlights were manufacture of wood products, except furniture (-9.1%) and leather articles and footwear (-5.3%), both resulting from the reduction of exported volume (-30.0% and -15.0%, respectively). The products belonging to “electronic material and communication equipment”, which recorded fall of 8.0%, also experienced decrease of exports (-17.9%) and increase of imports (17.9%).

 

The activities tobacco products (-7.8%) and chemical products (-7.2%) also recorded negative performances, in this case, as a consequence of internal demand. The little increase of food products and beverages (0.3%) also contributed to this lower increase rate.

 

Mining and quarrying industry grew 3.5% in 2008, with increase of 3.3% in the activity petroleum and natural gas and 0.6% in iron ore. The participation of petroleum and natural gas in value added rose from 1.7% to 2.1% in 2008, whereas the participation of iron ore almost doubled, having reached the level of 0.8% of gross value added.

 

Services – In services, value added at basic prices recorded a positive change of 4.9%, being above the average of economy in 2008, but beyond its own performance in the previous year (6.1%). Among the 15 activities that form the sector, eight recorded change in volume below that of 2007, and accounted for 71.4% of the value added of services, thus contributing to the reduction of the rhythm of increase. The change of value added prices was reduced from 7.3% to 6.8% in relation to the previous year. This combination of changes in volume and lower prices compared to those of other sectors led to decrease of participation of this group in the overall value added of economy, by 0.4. Such behavior was affected by the services of financial mediation, insurance and complementary social security, which recorded significant increase (12.6%), but still below the level reached in 2007 (15.1%).

 

Information services had the second biggest rise in volume (8.8%) in the group, above the figure in the previous year (7.4%). That happened mainly as a result of the expansion of mobile telephony services, computer science activities and cinematographic and video-related services. The activities of public education (-2.8) and domestic services (-0.8) kept their negative changes, and were affected by the decrease of enrollment in public education and by the reduction of employment, respectively.

 

 

Trade recorded positive change of 6.1%, below the performance observed in the previous year. The volume of car trade, which had recorded increase by 21.6% in 2007, changed 11.5% in 2008, affected by the expansion of credit. The trade of pharmaceutical, medical, orthopedic and dental items recorded change of 11.0% in volume, thus contributing to the growth of this activity.

 

The continuity of currency valuing and the increase of imports were two factors that benefited trade in the period. The rise of internal demand also influenced the change of prices in the sector, and that was 9.9%, that is, above the average of economy. This performance caused the participation of trade in value added at basic prices to rise from 12.1% to 12.5%, between 2007 and 2008.

Demand: investment in machinery and equipment increased 18.3%  

In 2008, the major increase among components of demand was that of gross fixed capital formation, with a rise of 13.6% in volume. The main responsible for this change was investment in machinery and equipment, which grew 18.3%.

 

Consumption - which had made up 79.1% of GDP in 2008 - recorded increase of 5.0%, being mainly represented by households. Household consumption expenditure rose 5.7%, whereas that of public administration rose 3.2%. This result is in accordance with the 7.9% rise of salary volume, according to data from the Monthly Employment Survey, of IBGE, and with the 30.3% rise, in nominal terms, of credit operations of the financial system for natural persons, according to data from the Central Bank of Brazil.  

 

The exchange rate in 2008 was, on average, 5.9% lower than that of 2007, having changed from R$1.95 to R$1.83 per dollar. That has contributed to the increase of imports, by 15.4%, and to the deceleration of exports increase (0.5% a year). From the perspective of demand, the bigger increase of imports, compared to that of exports – led to a negative contribution of the balance of goods and services to GDP.

 

 

 

In the analysis by goods and services consumed, the highlight is the consumption of information services (13.7%) and of services of financial mediation, insurance and complementary social security (12.5%). On the other hand, real estate and rental services (2.0%) and public administration, health and education and social security (3.0%) recorded the lowest increases.

 

Gross fixed capital formation for year 2008 corresponded to R$ 579.5 billion. This result meant increase by 24.9% in relation to the previous year, formed by real growth of 13.6% and price rise of 9.9%. For the period between 2004 and 2008, the real growth was only lower than that in 2007, when there was expansion by 13.9%.

 

The result of R$ 579.5 billion in 2008 corresponded to an investment rate of economy of 19.1%, and contributed to the increase in participation of Gross fixed capital formation in GDP, a trend observed since 2005. In the same year, the investment rate was 15.9%, having changed to 16.4% in 2006, 17.4% in 2007.

 

The three big groups of fixed assets that form gross fixed capital formation – machinery and equipment, civil construction and other products –recorded increase in comparison with the previous year. Machinery and equipment recorded the highest nominal change (30.8%) and change in volume (18.3%), and rise of prices (10.6%) Civil construction recorded increase of 18.3% in value, resulting from the change of 9.3% in volume and 8.3% in price, and the group other products recorded nominal increase of 15.3%, resulting from a change of 1.7% in volume and 13.3% in prices.

 

In terms of participation in gross fixed capital formation, machinery and equipment represented 56.7% (R$ 328.5 billion) of the total in 2008, civil construction represented 36.3% (R$ 210.4 billion) and the group other products represented 7.0% (R$ 40.6 billion). Machinery and equipment remained on a trend to increase in gross fixed capital formation, as observed in all the years of the period between 2004 and 2008. On the other hand, the participation of 36.3% of civil construction in 2008 was lower than in 2007 (38.3%), giving a sequence to the decrease of participation of this group of fixed assets in the composition of gross fixed capital formation.

 

In 2008, the performance of foreign trade was affected by the world financial crisis. The reduced demand for Brazilian goods and services by some of its commercial partners caused effects in real economy, especially after the3rd quarter of the year. However, the good results of exports observed throughout the year were enough to make up for this deceleration, guaranteeing nominal increase of 16.5% of exports of goods and services in relation to 2007. The increase was mainly due to the rise of prices (15.9%); volume remained practically stable (0.5%). By analyzing only exported goods, prices rose 19.1%, whereas volume decreased 2.7% compared to the figure in the previous year.

 

Exchange favored imports that changed positively in volume in all the categories of use. The highlight was capital goods, which recorded a significant rise in volume (28%), followed by goods and services for final consumption (23.6%) and goods and services for intermediate consumption (11.4%). The real growth of capital goods was affected by the imports of machinery and equipment (29.4%), indicating that the Real currency has stimulated the level of investment of economic activities. Opposite to exports, the increase of exports in value was caused by the increase of volume, and not by prices.

 

In 2008, the variation of stocks (difference between figures of final goods, semi-manufactured goods, goods being processed and raw material from the productive sectors in the beginning and end of the year) was R$ 47.6 billion. The main changes were those in products from manufacturing industry.

 

Income: 1.5 million job posts generated in 2008

 

The expansion of economy exerted direct influence on national labor market indicators. With reference to the total number of jobs, in relative figures, the performance of 2007 was maintained, now with increase of 1.6%. In absolute figures, this increase represents the generation of 1.5 million new job posts, that is, about 52 thousand posts more than in 2007.

 

Industry had the most significant performance in terms of job offers, with increase of 6.0%. Almost all the activities which belong to this group contributed to the result, especially civil construction, with an increase of 11.1% in the total number of jobs. Expansion accounted to a great extent for the gain in participation of industry in the overall employment generation in the country (from 20.1% to 20.9%, in 2008).  

 

The group services did not keep its trend to expansion in terms of employment, as observed in the two preceding years, in spite of the 1.5% observed in the indicator between 2007 and 2008. Even so, this change represented, in absolute figures, an increment in job posts by 873 thousand a year, given the total weight of activities that encompass the group of services in total employment (61.3%).

 

 

Considering jobs by type of participation in the job market, it is possible to observe the increase of formal employment, due to the existence of 5.6% more jobs with a formal contract, what surpassed the changes effected in the occupations without a formal contract: employees without a formal contract, with increase of 1.6% and self-employed workers facing decrease by 3.4%.

 

Among the components related to work, employee’s compensation represented 41.8% of revenue; and mixed income, 8.8%. The proportion of capital compensation, observed in the net operating revenue, corresponded to a 33.2% and the public administration corresponded to 16.2%. Employee’s compensation has been on an upward trend in the last four years, reflecting the positive evolution of job market in the period.