Brazil’s Economy Grows More Than China’s; Faces Lower Inflation Than Germany

In comparison with the same period last year, Brazil’s GDP grew by 3.2%, while the accumulated in the first half of 2022 advanced by 2.5%, only one-tenth below the accumulated of the last twelve months (2.6%).

This is the fourth consecutive positive result for the indicator.

The advance of the Brazilian economy in the second quarter was driven by the services sector, responsible for 70% of the country’s GDP, and by the industry.

Services grew by 1.3% in the period, mainly due to the strong dynamics of restaurants, hotels, and bars, services that are already seeing a stronger reactivation after the halt they underwent due to the pandemic.

The industry recorded the highest growth for the period (2.2%) as a result of activities related to utilities and waste management, construction, and mining.

The agricultural sector, which had been weighed down, recovered in this quarter and advanced 0.5% after falling 0.9% in the first three months of the year and 2.5% in the same period of 2021.

For the government, the advance of the Brazilian power “maintains the growth trajectory of 2022” and the result of the second semester “confirms the sustainability of the country’s economic activity,” according to a note released by the Ministry of Economy.

The growth rate, according to the ministry, reflects a “faster” recovery than that of other countries, including “some emerging countries”, because among the G-20 countries, “Brazil presented the second-best result.”

The economic performance recorded in the second quarter of the year was higher than expected by many market analysts, who had estimated average growth of 0.9%.

The growth of the Brazilian economy forecast for this year is 2%, and if confirmed, it will show a deceleration compared to the strong expansion recorded in 2021.

As a consequence of the crisis generated by the pandemic, Brazil’s economy contracted by 3.9% in 2020, its largest drop in more than two decades, but, following the reactivation of activities, it rebounded last year, when GDP grew by 4.6%, its largest increase in a decade.

More growth than China and lower inflation than Germany