Brazil Q4 Economic Growth Disappoints Amidst Declining Household Consumption
Brazil’s economy grew by 0.2% in Q4 2024, falling short of the expected 0.5% growth. Industrial output rose by 0.3%, driven mainly by construction, manufacturing, and mining, while services saw only slight increases. Demand was supported by fixed investment and government spending, though household consumption dropped sharply. Net trade positively impacted GDP as exports rose and imports fell.
In the final quarter of 2024, Brazil’s economy experienced a modest growth of 0.2% quarter-on-quarter, which was a decline from the previously adjusted 0.7% growth observed in the third quarter. This figure was also below market projections of 0.5%, indicating a weaker performance than expected.
Within the industrial sector, output improved by 0.3%, primarily buoyed by strong gains in various sectors: construction grew by 2.5%, manufacturing expanded by 0.8%, and mining registered an increase of 0.7%. Conversely, the services sector saw only a slight growth of 0.1%, with key contributions from transportation and storage (0.4%) as well as trade (0.3%).
On the demand side, higher fixed investment (0.4%) and government spending (0.6%) mitigated the adverse impact of a significant decline in household consumption, which plummeted by 1.0%. In terms of trade, net exports positively influenced GDP, as exports rose by 1.3% while imports decreased by 0.1%.
Brazil’s economic growth in Q4 2024 was weaker than anticipated, achieving only 0.2% growth amidst falling household consumption. Though industrial output showed moderate improvement and net trade contributed positively, the performance ultimately fell short of the expected growth rates, reflecting underlying challenges in the economy.
Original Source: www.tradingview.com
