Alongside household consumption, international demand for raw materials produced by the country was one of the drivers of the 1% growth in Brazil’s Gross Domestic Product (GDP) from the fourth quarter of 2021 to the first of this year.
Exports grew by 5%, while imports dropped by 4.6%. This engine of the economy, however, could procrastinate in the second half of the year, economists warn.
Among the export activities, the highlights were Brazilian sales of agricultural products, food products, petroleum derivatives and metal products.
According to analysts, global demand is likely to run out of steam – which means less foreign purchases of Brazilian products – because high inflation spreads across the world, with the reaction of rising interest rates by central banks.
A warning sign appeared in a ranking prepared by the Austin Rating agency.
Among 32 countries that released GDP data in the first quarter, important economies registered a retraction. Brazil was in the ninth best position.
chinese brake
Compounding the apprehensions, China’s outlook has been revised downwards in the face of trying to contain new waves of Covid-19 with social isolation. The world’s second largest economy and Brazil’s main trading partner ranked fifth.
According to Austin Rating’s chief economist, Alex Agostini, responsible for the survey, the performance of the Brazilian economy is driven by less interference from the pandemic and by the delay in the practical effects of the increase in interest rates, while other nations, especially developed ones, have already feel the handbrake pulled due to the monetary tightening.
“Brazil has not yet been affected to a large extent by the effects of restrictive monetary policy with an increase in interest rates. This will happen with greater intensity from the second half of the year onwards, when high interest rates and high inflation will have an even greater effect on household consumption,” said Agostini.
The retraction in investments leaves a downward trend for the country’s GDP, evaluated the coordinator of the Economic Department of Banco ABC Brasil, Daniel Xavier.
“The GDP result came close to what was expected, but the composition was not very favorable”, he said. “In addition to the reduction in investments, for which we expected a rise of 0.3%, we had weak agriculture (-0.9%, compared to a 0.4% projection by ABC Brasil), with poor performance of the soybean and rice crops. .”
Despite the fall in the soybean harvest due to the drought in the south of the country, agriculture was the sector that most boosted exports in the first quarter, according to Rebeca Palis, coordinator of National Accounts at the IBGE.
The information is from the newspaper O Estado de S. Paulo.
Source: CNN Brasil
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