GDP of the first quarter of 2005 measured at market prices was R$ 438.6 billion, being R$ 388.7 billion of Value Added at basic prices and R$ 49.9 billion of Taxes over Products. Among the components of Value Added, Agriculture reached R$ 35.9 billion, Industry R$ 151.7 billion and Services R$ 223.4 billion. 

Among the components of demand, in the same period, Family Consumption totaled R$ 252.5 billion, Government Consumption R$ 75.9 billion and Gross Fixed Capital Formation R$ 87.5 billion. The Balance of Goods and Services presented a surplus of R$ 18.2 billion (R$ 75.6 billion of exports and R$ 57.4 billion of imports), and the Variation of Inventories was R$ 4.5 billion.

Net lending grows by 2.1 billion

 Net lending amounted to R$ 7.2 billion in the first quarter of 2005, which means that it increased R$ 2.1 billion in relation to a similar period of 2004 (Net lending of R$ 5.1 billion). This increase occurred, mainly, due to the variation of the Foreign Current Balance (R$ 2.2 billion) caused by the elevation of the Foreign Balance of Goods and Services, which changed from a surplus of R$ 15.4 billion in the first quarter of 2004, to R$ 18.2 billion in the same period of 2005.

Gross National Income reached R$ 424.9 billion in the first quarter of 2005 against R$ 382.7 billion in the similar period of 2004. In this same base of comparison, Gross Savings reached R$ 98.8 billion in 2005, representing an increase of R$ 7.1 billion, when compared to the first quarter of 2004 (R$ 91.7 billion). Tables V.I and V.II portray the Quarterly Economic Accounts and the Transactions of the Rest of the World with the National Economy in the first quarter of 2004 and 2005.

Table IV.1 – Integrated Economic Accounts – 1Q/ 2004 and 2005

National Economy

Table IV.2 – Integrated Economic Accounts – 1Q/ 2004 and 2005

Transactions of the rest with the National Economy

Foreign funding increases by R$ 20 billion

In the first quarter of 2005, the national economy totaled a net positive funding of R$ 25.8 billion with the rest of the world. In the same quarter of 2004, this value was R$ 5.7 billion, a growth of R$ 20.1 billion. Regarding the investments in assets, a positive net result of R$ 33.2 billion was observed in the first quarter of 2005, compared to a net positive investment of R$ 10.6 billion in the first quarter of 2004.

The high net positive funding in the first quarter of 2005 occurred due to the reduction of the amortization of loans and financing; to the increase of entrance of short-term loans, the long-term securities operations, and the entrance of loans between companies from main offices to branches in Brazil. Regarding the result of the net positive investment in the quarter, it can be observed the growth of cash and deposits abroad, which reached R$ 33.4 billion.

Tables IV.3 and IV.4 summarize the aggregated results of assets operations and liabilities of the National Economy with the Rest of the World, in the comparison with the same quarter of 2005 and the first quarter of 2004.

Table IV.3 – Financial Account Aggregates – 1Q/ 2004 and 2005(with the accounting of the agreements with the IMF)

International reserves change from R$ 7.4 to R$ 27.6 billion

This accumulation of international reserves, in the first quarter of 2005, is the highest in the quarter, in the last ten years. For this increase, contributed the net purchases of the Central Bank in the exchange market which, between January and March 2005, summed approximately US$ 10.2 billion and the emission of sovereign bonds, which summed in the quarter, US$ 2.9 billion.

In table IV.3 it can be observed the growth of the accumulation of international reserves, which reached R$ 27.6 billion, against an accumulation of R$ 7.4 billion in the first quarter of 2004. Without the accounting of the operations with the IMF - table IV.4 -, the accumulation of reserves would have reached R$ 30.7 billion. In the aggregates which account the agreements with the IMF, as well as those which exclude this accounting, the accumulation of international reserves in the first quarter of 2005 is significantly above the accumulation of the total of the year of 2004. Besides this, the accumulation of international reserves in R$ 27.6 billion in this quarter is the highest of the last ten years. Contributing for this increase stood out the net purchases of the Central Bank in the exchange market which, between January and March 2005, summed around US$ 10.2 billion. Besides the acquisitions realized by the Monetary Authority, there was in the quarter the emission of Sovereign Bonds, which summed US$ 2.9 billion.

Regarding the performance of the financial instruments, table IV.5 presents the liabilities and assets operations of the National Economy for the first quarters of 2004 and 2005.

In relation to the instrument F.2 – cash and deposits - it can be observed the growth of the net positive investment, which changed from R$ 12.0 billion in the first quarter of 2004 to R$ 33.4 in the same period of 2005. This growth was influenced by the increase in the reserves in form of deposits abroad which changed from R$ 13.7 billion to R$ 30.8 billion between the quarter aforementioned.

The financial instrument F.3 – Securities except Shares – registered growth of approximately R$ 4.2 billion in the net positive funding, changing from R$ 4.3 billion to R$ 8.6 billion in the first quarter of 2005. This trend occurred due to the reduction of the amortizations of long-term fixed revenue securities negotiated with the foreign market, particularly notes and commercial papers and the emission of Sovereign Bonds abroad.

The reduction of the net negative funding in the instrument F.4 – Loans and Financings– can be related to two components. The first one refers to the elevation of funding of short-term loans and financings. Besides this factor there was a reduction of paid amortizations, which passed from R$ 12.5 billion in the first quarter of 2004 to R$ 10.2 billion in the first quarter of 2005. In this reduction of approximately R$ 2.3 billion in the paid amortizations in the first quarter of 2005 stand out the decreases of the payments of R$ 765.7 million to the IMF, R$ 899.2 million to other international organizations and R$ 1.3 billion referent to the financings of long term purchasers.

Increased in 242% the entrance of resources through loans of main offices abroad to branches in Brazil

The net positive funding in shares and other capital participation – F5 – showed a slight fall, changing from R$ 11.4 billion in the first quarter of 2004 to R$ 11.1 billion in the same period of 2005. It could be observed, in this quarter, the growth of the net entrance of foreign resources through the purchase of shares of Brazilian companies, which passed from R$ 2.0 billion in the first quarter of 2004 to R$ 5.9 billion in the same period of 2005.

Regarding the instrument F.7 – other credits and debits, there was a reversion of the negative net borrowing of R$ 616.7 million in the first quarter of 2004 to a positive net funding of R$ 7.1 billion in the same period of 2005. This change occurred due to the growth of the entrance of inter-company loans from main office abroad to branches in Brazil – which reached R$ 7.0 billion in the first quarter of 2005, against R$ 2.1 billion in the same period of 2004 – registering, an elevation of 242%.

(1) Including variations of the reserve assets.

(2)  Excluding the variation of the reserve assets