GDP drops 9.7% in Q2 2020

September 01, 2020 09h00 AM | Last Updated: September 02, 2020 03h04 PM

In the seasonally-adjusted series, the Gross Domestic Product - GDP dropped 9.7% in the second quarter of 2020 compared with the first quarter of 2020. The GDP fell 11.4% in relation to the same period of 2019. Both rates were the most intense in the time series, started in 1996. The cumulative GDP in the four quarters ending in June recorded a drop of 2.2% in relation to the four immediately previous quarters.

At current values, the GDP added up to R$1.653 trillion in the second quarter of 2020, being R$1.478 trillion relative to Value added - VA at basic prices and R$175.4 billion, to Product taxes net of subsidies .

In the second quarter of 2020, the investment rate was 15.0% of the GDP, below that reported in the same period of 2019 (15.3%).

In the first semester of 2020, the GDP dropped 5.9% in relation to the same period of 2019. In this comparison, Agriculture (1.6%) performed positively, whereas Industry (-6.5%) and Services (-5.9%) dropped. The support material of the Quarterly National Accounts is on the right side of this page.

Comparison period Indicators
GDP AGRICULTURE INDUSTRY SERVICES GFCF CONSUMPTION HOUSEHOLDS CONSUMPTION GOVERNMENT
Quarter / immediately previous  quarter (with seasonal adjustment) -9.7% 0.4% -12.3% -9.7% -15.4% -12.5% -8.8%
Quarter / same quarter a year ago (without seasonal adjustment) -11.4% 1.2% -12.7% -11.2% -15.2% -13.5% -8.6%
Cumulative in four quarters / same period a year ago (without seasonal adjustment) -2.2% 1.5% -2.5% -2.2% -2.1% -2.5% -2.4%
Current values in the quarter (R$) 1.7 trillion 125.4 billion 287.5 billion 1.1 trillion 247.5 billion 1.0 trillion 370.2 billion
Investment rate (GFCF/DDP) in Q2 2020 = 15.0%
Savings rate (SAVING/GDP) in Q2 2020 = 15.5%

GDP drops 9.7% in relation to immediately previous quarter

Under the effects of the COVID-19 pandemic and social distancing, the GDP dropped 9.7% in the second quarter of 2020, in relation to the first quarter of 2020, in the seasonally-adjusted series. This was the most intense drop in the time series, started in 1996. Among the segments, the biggest drop was in Industry (-12.3%), followed by Services (-9.7%). Agriculture registered a positive change of 0.4%.

Among the industrial activities, the drops in Manufacturing industries (-17.5%), in Construction (-5.7%), in the activity of Electricity and gas, water, sewage and waste management activities (-4.4%) and in Mining industries (-1.1%) stood out.

In Services, the negative results were: Other services activities (-19.8%), Transportation, storage and mailing (-19.3%), Trade (-13.0%), Administration, defense, public health and education, and social security (-7.6%) and Information and communication (-3.0%). On the other hand, Financial activities, insurance and related services (0.8%) and Real estate activities (0.5%) recorded positive results. Under the point of view of the expenditures, Gross Fixed Capital Formation (-15.4%), Household Consumption Expenditure (-12.5%) and Government Consumption Expenditure (-8.8%) dropped in relation to the immediately previous quarter.

Exports of Goods and Services increased 1.8%, while Imports of Goods and Services retreated 13.2% over the first quarter of 2020.

Main results of the GDP at market prices from Q2 2019 to Q2 2020 (%)
Rates (%) 2019,II 2019,III 2019,IV 2020,I 2020,II
Cumulative in the year / same period a year ago 0.8 1.0 1.1 -0.3 -5.9
Last four quarters / four immediately previous quarters 1.1 1.0 1.1 0.9 -2.2
Quarter / same quarter a year ago 1.1 1.2 1.7 -0.3 -11.4
Quarter / immediately previous  quarter (with seasonal adjustment) 0.5 0.1 0.5 -2.5 -9.7
Source: IBGE, Diretoria de Pesquisas, Coordenação de Contas Nacionais  

Drop of 11.4% over Q2 2019 is the biggest in the time series, started in 1996

Compared with the same period of 2019, the GDP fell 11.4% in the second quarter of 2020, being the biggest quarterly retraction in the time series, started in 1996, for this comparison basis. The Value Added at basic prices decreased 10.8% and the Product Taxes less Subsidies, 15.6%.

Among the activities, Agriculture rose 1.2% over the same period of 2019, which can be mainly explained by the performance of some agricultural products that have a relevant harvest in the second quarter and by productivity.

Industry dropped 12.7%, the most intense drop in the time series in this comparison. The activity of Manufacturing industries posted its worst result (-20.0%), another negative record in the time series, mainly influenced by the retreat in the manufacture of vehicles; other transportation products; machinery and equipment; and textiles and wearing apparel. The second most intense retreat came from Construction (-11.1%), supported by the reduction in employment and in the production of its inputs.

The activity of Electricity and gas, water, sewage and waste management activities fell 5.8%, explained by the drop in the economy as a whole. Conversely, Mining and quarrying industries registered a positive change of 6.8% with the increase in the extraction of petroleum. The extraction of ferrous ores continued to drop, though at lower rates.

Services fell 11.2% in relation to the same period of 2019, the biggest drop ever registered in the time series. The worst results were in Other services activities (-23.6%) and in Transportation, storage and mailing (-20.8%). Trade (-14.1%), Administration, defense, public health and education, and social security (-8.6%) and Information and communication (-3.2%) dropped. On the other hand, Financial activities, insurance and related services (3.6%) and Real estate activities (1.4%) recorded positive figures.

Household consumption expenditure retracted 13.5%, which represented the biggest drop ever registered in the time series. This was the second negative result in this comparison after 11 quarters of advances. The index could be explained by social distancing in Brazil, prohibition of operation of some activities, especially services rendered to families, as well as by the drop in the wage bill in Brazil in the second quarter of 2020.

Gross Fixed Capital Formation declined 15.2% in the second quarter of 2020 in relation to the same period of 2019. The drop was explained by the negative figures recorded both in the domestic production of capital goods and in construction. Government Consumption Expenditure fell 8.6% in relation to the second quarter of 2019.

In the foreign sector, Exports of goods and services increased 0.5%, whereas Imports of goods and services retreated 14.9% in the second quarter of 2020.

GDP drops 2.2% in cumulative index in four quarters

The cumulative GDP over the four months ending in June 2020 retracted 2.2% in relation to the four immediately previous quarters.  This rate resulted from the decline of 2.1% in the Value Added at basic prices and of 3.0% 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 (1.5%), Industry (-2.5%) and Services (-2.2%).

Investment rate is 15% in Q2

In the second quarter of 2020, the investment rate was 15.0% of the GDP, below that reported in the same period last year (15.3%). The savings rate was 15.5% against 13.7% in the same period of 2019.

GDP in the first semester drops 5.9%

The GDP fell 5.9% in the first semester of 2020 over the same period of 2019. In this basis for comparison, Agriculture (1.6%) performed positively. In Industry (-6.5%) and Services (-5.9%), the performance was negative.

GDP hits 1.7 trillion in the second quarter of 2020

The Gross Domestic Product added up to R$1.653 trillion in the second quarter of 2020, being R$1.478 trillion relative to Value Added at basic prices.

Classes of activity in the value added at basic prices and GDP components under the point of view of expenditures at current values (R$ million)
Specification 2019,II 2019,III 2019,IV 2019 2020,I 2020,II
Agriculture 90,078 79,682 59,979 321,957 119,691 125,417
Industry 322,471 351,717 331,673 1,300,603 305,450 287,544
Services 1,128,303 1,151,597 1,222,993 4,590,217 1,113,292 1,064,582
Value Added at Basic Prices 1,540,852 1,582,996 1,614,645 6,212,777 1,538,433 1,477,543
Taxes on products 254,954 259,703 278,095 1,044,149 264,988 175,408
GDP at Market Prices 1,795,806 1,842,700 1,892,740 7,256,926 1,803,421 1,652,951
Household Consumption Expenditure 1,153,132 1,188,423 1,239,127 4,712,375 1,162,204 1,002,720
Government Consumption Expenditure 360,898 354,891 423,377 1,471,891 343,521 370,173
Gross Fixed Capital Formation 275,238 299,569 280,576 1,114,421 285,059 247,452
Exports of Goods and Services 263,380 272,964 270,205 1,039,367 265,798 324,329
Imports of Goods and Services (-) 253,994 292,990 276,573 1,063,445 280,847 264,291
Stock Variation -2,848 19,843 -43,973 -17,684 27,685 -27,432
Source: IBGE, Diretoria de Pesquisas, Coordenação de Contas Nacionais.
Note: All the results are calculated based on the Quarterly National Accounts.