GDP monitor points to a 0.6% increase in July, shows FGV

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The GDP Monitor, calculated by the Brazilian Institute of Economics of Fundação Getulio Vargas (Ibre/FGV), points to a growth of 0.6% in economic activity in July compared to June, considering seasonally adjusted data. In the inter-annual comparison, the economy grew 3.1% in July and 3.3% in the moving quarter ended in July.

According to Juliana Trece, coordinator of FGV’s GDP Monitor, the growth in economic activity in July reflected the positive performance of industry and the service sector.

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“In services, the seven activities covered by the GDP-FGV Monitor grew compared to June. From the demand point of view, with the exception of gross fixed capital formation, the performance was also positive in its other components. These data indicate that the performance of the economy in July was mainly explained by consumption, a pattern that has been observed throughout the year”, says the research coordinator.

Gross fixed capital formation, which signals the expansion of the economy’s productive capacity, dropped in July, after five quarters of growth. “The analysis of an isolated month is not enough to indicate a deceleration trend in this component. However, it can be a warning of weakening when one considers that interest rates are at high levels and this tends to negatively impact the expansion of the economy’s productive capacity”, he said.

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The GDP Monitor anticipates the trend of the main index of the economy from the same data sources and methodology used by the Brazilian Institute of Geography and Statistics (IBGE), responsible for the official calculation of the National Accounts.

Household consumption grows in July

Household consumption grew 0.5% in July compared to June. In the inter-annual monthly comparison, it grew 3.6% in July and 4.3% in the moving quarter ended in July. This growth is explained by the performance of consumption of non-durable products and, mainly, by the consumption of services.

Exports of goods and services grew by 1.6% in July compared to June. Imports grew 3.4% in the same period.

In monetary terms, the GDP was 5 trillion 482 billion and 820 million reais until July 2022, in current values.

The economy’s investment rate in July was 18.6%, in the series at current values.

Source: CNN Brasil

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