Driven by services, Brazilian GDP should grow 1.1% in 2022, says Ipea

The Brazilian Gross Domestic Product (GDP) should grow 1.1% in 2022. This is what the projection made by the Institute of Applied Economic Research (Ipea) on Thursday (31) points out.

In absolute values, the result represents an additional injection of R$ 95.5 billion, compared to last year.

The growth of the Brazilian economy should be driven mainly by the services sector, with an expected increase of 1.8% in 2022. The segment will move about R$ 92.8 billion more, compared to the previous year. It is the only sector that already has pre-pandemic levels.

THE CNN, the director of Ipea, Marco Cavalcanti, highlights that the rehabilitation of the sector is linked to the best epidemiological scenario in the country. He also details which are the most important services for the segment’s recovery.

“All the services provided to families are fundamental for the improvement of Brazil’s economy. I’m talking about hairdressing, gym, language course, and others. In addition to these services, we also have accommodation expenses, which represent a large portion of the segment. But yes, we need to remember that the good result is possible thanks to the best scenario of the Covid-19 pandemic and, consequently, the reduction in economic restrictions”, said Marco Cavalcanti.

In the opposite direction of services, the other productive sectors should register a timid recovery in 2022. Agribusiness will grow only 1% in the coming months. With the worst indicators in the country, the Brazilian industry will have a fall of 0.8%.

“The service sector is the one that recovers the most in Brazil. The segment shows very positive signs for the future, being the only segment that has fully recovered from the pandemic. Agriculture is not having a very good year. And the industrial sector is the worst of all, it is registering more losses than gains throughout the year. For example, the industry is already feeling inflationary pressure, a fact that still does not affect other sectors”, said CNC economist Fábio Bentes.

Following the increase in the production of wealth in the country, several economic indicators have already shown improvements in the first months of the year: a rise in the number of hires and a drop in the underutilized population.

Data released by the Brazilian Institute of Geography and Statistics (IBGE), this Thursday (31), show that the unemployment rate dropped to 11.2% in the quarter ended in February. This is the third consecutive drop in the indicator.

The survey also shows a 25% drop in the underutilization rate compared to the previous quarter. In practice, the underutilized population rose from 29.1 million to 27.3 million. The service sector alone hired 652,000 more people in the quarter ended in February, compared to the previous one.

And the expectation is that the scenario will continue to improve. According to Ipea, for 2023, GDP growth will be 1.7%. According to the researchers interviewed by the CNNthe good result is linked to the gradual reduction of the interest rate forecast for the next two years.