GDP falls 1.5% in Q1 2020

May 29, 2020 09h00 AM | Last Updated: June 01, 2020 11h35 AM

In the seasonally-adjusted series, the Gross Domestic Product - GDP retreated 1.5% in the first quarter of 2020 in relation to the fourth quarter of 2019. The GDP registered a negative change of 0.3% compared with the same period of 2019. The cumulative index in the four quarters ended in March 2020 rose 0.9% compared with the four immediately previous quarters.

Comparison period Indicators
GDP AGRIC INDUS SERV GFCF CONS. HHOLDS CONS. GOV
Quarter / immediately previous  quarter (with seasonal adjustment) -1.5% 0.6% -1.4% -1.6% 3.1% -2.0% 0.2%
Quarter / same quarter a year ago (without seasonal adjustment) -0.3% 1.9% -0.1% -0.5% 4.3% -0.7% 0.0%
Cumulative in four quarters / same period a year ago (without seasonal adjustment) 0.9% 1.6% 0.7% 0.9% 3.0% 1.3% -0.4%
Current values in Q1 (R$) 1.8 trillion 119.7 billion 305.5 billion 1.1 trillion 285.1 billion 1.2 trillion 343.5 billion
Investment rate (GFCF/GDP) in Q1 2020 = 15.8%
Savings rate (SAVING/GDP) in Q1 2020 = 14.1%

At current values, the GDP added up to R$1.803 trillion in the first quarter of 2020, being R$1.538 trillion relative to Value added - VA at basic prices and R$265.0 billion to Product taxes net of subsidies.

Still in the first quarter of 2020, the investment rate was 15.8% of the GDP, above that reported in the same period of 2019 (15.0%). The support material of the Quarterly Accounts is on the right side of this page.

GDP retreats 1.5% in relation to immediately previous quarter

Affected by the pandemic and social distancing, the GDP shrank 1.5% comparing the first quarter of 2020 with the fourth quarter of 2019 in the seasonally-adjusted series. Industry (-1.4%) and Services (-1.6%) declined, while Agriculture (0.6%) grew.

Among the industrial activities, the drop was leveraged by Mining and quarrying industries (-3.2%), though Construction (-2.4%), Manufacturing industries (-1.4%) and the activities of Electricity and gas, water, sewage and waste management activities (-0.1%) also registered negative rates.

In Services, Other services (-4.6%), Transportation, storage and mailing (-2.4%), Information and communication (-1.9%), Trade (-0.8%), Public administration, health and education (-0.5%) and Financial intermediation and insurance (-0.1%) recorded negative figures. The only positive change came from Real estate activities (0.4%).

Under the point of view of expenditure, Household consumption expenditure (-2.0%) fell, whereas Gross fixed capital formation (3.1%) and Government consumption expenditure (0.2%) posted positive changes in relation to the immediately previous quarter.

Concerning the foreign sector, Exports of goods and services fell 0.9%, whereas Imports of goods and services increased 2.8% over the fourth quarter of 2019.

GDP changes -0.3% compared with Q1 2019

When compared with the same period last year, the GDP retreated 0.3% in the first quarter of 2020. The Value Added at basic prices decreased 0.2% and the Product Taxes less Subsidies, 0.4%.

Agriculture grew 1.9% over the same period a year ago. This result can be mainly explained by the performance of some farm products that produced a relevant harvest in the first quarter, like soybeans, and by the productivity, very clear in the estimate of the change in the amount produced in relation to the planted area.

Industry registered a negative change of 0.1%. In this context, the activity of Electricity and gas, water, sewage and waste management activities (-1.8%) recorded the biggest drop, due to the pandemic and social distancing, as well as to a milder summer.

The second biggest retreat came from Construction (-1.0%), with drops in the employment and manufacture of its typical inputs. Manufacturing industry (-0.8%) also retracted, mainly influenced by the car industry, manufacture of wearing apparel and manufacture of other transportation equipment.

Mining and quarrying industries (4.8%), in turn, rose, mainly benefited from the growth of extraction of petroleum and gas, which offset the drop in the extraction of ferrous minerals.

Services fell 0.5% compared with the same period last year, highlighted by Other services activities (-3.4%), highlighted by Services rendered to families, Transportation, storage and mailing (-1.6%) and Administration, defense, public health and education, and social security (-0.4%). Financial activities, insurance and related services (2.0%), Real estate activities (1.6%), Information and communication (1.3%) and Trade (0.4%) expanded.

Household consumption dropped 0.7%. This result can be explained by the pandemic and social distancing, which negatively affected the labor market, jeopardizing the demand, in addition to the effects on the supply.

Gross fixed capital formation advanced 4.3% in the first quarter of 2020. This growth was justified by the increase in the net imports of machinery and equipment, mainly to the activities of oil and gas, which offset the drop in the national output of capital goods and in Construction. Government consumption expenditure remained stable (0.0%) in relation to the first quarter of 2019.

In the foreign sector, Exports of Goods and Services fell 2.2%, whereas Imports of Goods and Services increased 5.1% in the first quarter of 2020. Among the exports of goods, the sectors that mostly contributed to the negative result were: machinery and equipment, extraction of metallic minerals and motor vehicles. In the imports of goods, the rise was mainly due to machinery and equipment, basic metals and electrical devices.

GDP grows 0.9% in the cumulative index in four quarters

The cumulative GDP in the four quarters ending in March 2020 rose 0.9% in relation to the four immediately previous quarters. This rate resulted from the advances of 0.9% in the Value Added at basic prices and of 1.3% in the Product Taxes Net of Subsidies. The result of Value Added in this type of comparison reflected the performance of the following segments: Agriculture (1.6%), Industry (0.7%) and Services (0.9%).

Under the point of view of expenditure, Gross fixed capital formation increased 3.0% and Household consumption expenditure, 1.3%. Government consumption expenditure negatively changed 0.4%. In the foreign sector, Exports of Goods and Services retreated 2.7%, whereas Imports of Goods and Services increased 2.9%.

Investment rate is 15.8% in Q1

In the first quarter of 2020, the investment rate was 15.8% of the GDP, above that reported in the same period last year (15.0%). Also in the first quarter of 2020, the savings rate was 14.1% (against 12.2% in the same period of 2019).

Net Lending reached R$58.3 billion versus R$57.5 billion in the same period in the previous year.  This result was mainly explained by the reduction of R$8.0 billion in the external balance of goods and services and of R$6.6 billion in Net Property Income sent to the Rest of the World.