MercoPress. South Atlantic News Agency

Brazil posts GDP growth above expectations in 2Q of 2024

The IBGE also reported a 1.4% increase in exports of goods and services in the second quarter of 2024

According to a report from the Brazilian Institute of Geography and Statistics (IBGE) released this week, the Gross Domestic Product (GDP) in South America's largest country grew 1.4% in the second quarter of 2024 from the year's first trimester, far exceeding expectations, Agencia Brasil reported. The country’s total wealth amounts to R$ 2.9 trillion (nearly US$ 514 billion). The GDP represents the sum of all wealth produced in the country.

Compared to the second quarter of 2023, the economy grew by 3.3%. The standout performer between April and June this year was the industrial sector, which increased by 1.8% from the first to the second quarter. This was followed by the services sector, which saw a 1% growth.

Agriculture declined by 2.3% between the first and second quarters of 2024 and by 2.9% compared to the same period in 2023. With this week's announcement, the GDP for this year totals R$ 2.9 trillion, comprising R$ 2.5 trillion in Value Added at basic prices and R$ 387.6 billion in taxes on products. The investment rate in the second quarter, which reflected the economy's strong performance, stood at 16.8% of GDP, up from 16.4% in the same quarter of 2023.

The strong performance in industry was driven by significant gains in the electricity and gas, water, sewage, and waste management sectors, which rose by 4.2%. This was followed by construction, which grew by 3.5%, and manufacturing, which increased by 1.8%. However, the extractive industries experienced a 4.4% decline in the second quarter compared to the first.

In the services sector, financial, insurance, and related services grew by 2%, while information and communication technology increased by 1.7%. Trade saw a 1.4% rise, followed by transport, storage, and mail, which grew by 1.3%. Administration, defense, public health, education, and social security each grew by 1%, real estate activities rose by 0.9%, and other trade activities increased by 0.8%.

The IBGE also reported a 1.4% increase in exports of goods and services in the second quarter compared to the first while imports of goods and services rose by 7.6% over the same period.

São Paulo Supermarket Association (Apas) Chief Economist Felipe Queiroz highlighted that these results surpassed market expectations. “The Brazilian economy has shown growth, primarily driven by the supply side, particularly in the industry sector, which has experienced a significant and robust recovery. This improvement is partly due to the exchange rate providing some protection for our local industry against international competitors, as well as growth in the services sector,” he stated.