MercoPress. South Atlantic News Agency

Brazil's economic activity going up, Central Bank index shows

The positive results were recorded even though coffee production registered a significant drop, the IBGE reported

Brazil's economy jumped 1.17% in July from June's figures, according to the Central Bank's Economic Activity Index (IBC-Br) released Thursday based on seasonally adjusted data.

Since last year, the results of the IBC-Br have been oscillating. In April and May, it fell, in June it showed a growth of 0.69% and now another increase.

The mercurial IBC-Br index helps the Central Bank to make decisions about the basic Selic interest rate, currently set at 13.75% per year. The index incorporates information about the level of activity of the three sectors of the economy, industry, commerce, and services, as well as agriculture and cattle-breeding, in addition to taxes.

The measurement was created by the Central Bank to oversee the evolution of economic activity, although the official indicator is the Gross Domestic Product (GDP, the sum of goods and services produced in the country), calculated by the Brazilian Institute of Geography and Statistics (IBGE).

In 2021, Brazil's GDP grew 4.6%. In the first half of 2022, the indicator has already advanced 2.5%.

Meanwhile, agricultural output in 2021 has reached a new record, according to the IBGE: It reached R$ 743.3 billion (US$ 142.09 billion), an 58.6% increase of over the previous year. The planted area totaled 86.7 million hectares, representing an expansion of almost 3.3 million hectares, an area 3.9% larger than that recorded in 2020. After two consecutive years of records in the series, the grain harvest fell 0.4% in 2021, with 254.4 million tons.

The data are included in the Produção Agrícola Municipal (PAM) 2021 report released Thursday by the IBGE. The study showed that among the crops that have most contributed to this growth, soybean topped the list. It reached 134.9 million tons, generating R$ 341.7 billion (US$ 65.32 billion) in gross value, an increase of 102.1% compared to the previous harvest, which had been a record in the historical series.

Corn remained the second agricultural product in value, despite the 14.9% drop in volume (88.5 million tons) for revenues worth R$ 116.4 billion (US$ 22.25 billion), a 60.7% improvement from 2020 figures, according to IBGE,

The study also showed a high external and internal demand for agricultural commodities, with the US dollar remaining stable against the real, in addition to the rise in the price of fuel, which has kept agricultural products at high levels, which resulted in Brazil's agriculture recording new value highs in 2021.

“The year was marked by climatic instability between autumn and winter, which mainly affected the development of second-crop crops in much of the country. Crops such as corn, sugar cane, and coffee showed a significant drop in production. The states of Paraná and Mato Grosso do Sul were the most affected,” IBGE reported.

“However, the main temporary crops with predominant cultivation in the first harvest, such as soybeans and rice, showed good results. The highlight for the state of Rio Grande do Sul, which showed good recovery, after weather problems faced in the previous year, which affected the productivity of various crops in the gaucho territory,” added the institute.

The quantity of sugarcane produced had a retraction of 5.3% in 2021, influenced by unfavorable weather factors and a reduction in the cultivation area. However, the value of production achieved in the year was 24.4% larger, a result of higher sugar and ethanol prices.

“Coffee production, another important national agricultural product, in a year of negative biennials for the Arabica type, registered a significant drop in production compared to the previous harvest, with a reduction of 19.2%,” the IBGE document went on.

(Source: Agencia Brasil)