Brazil’s economy grew 0.9% in the second quarter of the year | Business

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 Brazil's economy grew 0.9% in the second quarter of the year |  Business
Busy bars and restaurants in one of the downtown squares on a weekend in the city of Rio de Janeiro. Leonardo Carrato

Brazil’s gross domestic product (GDP) grew 0.9% in the second quarter of the year compared to the previous quarter, the Brazilian statistics institute IBGE reported this Friday. Despite the timid growth, the data surprised financial market analysts, who expected an increase of just 0.3%. “We are overcoming skepticism about GDP growth, now we have positive growth data for the country,” said Economy Ministry number two Dario Durigan on Friday.

The Brazilian economy grew between April and June, mainly thanks to industry, which grew by 0.9% due to the dynamism of raw materials extraction, construction, electricity, water and waste management. In second place is the service sector, which accounts for 70% of Brazil’s GDP and has not experienced any negative fluctuations for 12 quarters. It grew by 0.6%. Finally, the strong agricultural and livestock sector fell by 0.9%, although this setback can be explained by the fact that the first quarter saw record growth of 21% thanks to an exceptional harvest.

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According to the statistics institute, family consumption increased by 0.9% (the largest increase in a year) on the back of falling inflation, adjustments to income-sharing programs and improving labor markets. Government spending, on the other hand, rose by 0.7%. Compared to the first quarter of 2023, exports increased by 2.9% and imports of goods and services by 4.5%.

In a year-on-year comparison, the picture of the Brazilian economy is somewhat more colorful: Compared to the same quarter of 2022, the GDP of the South American giant grew by 3.4%, and growth over the last 12 months totaled 3.2%. . In the first semester, the lead is 3.7% compared to the same period in 2022.

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The government does not expect the economy to keep the same pace in the coming months as it did at the start of the year, but still expects to end 2023 with GDP growth of 2.5%, higher than what came before months was forecast.

Positive labor market data was also released this week: in the May-July quarter, unemployment fell to 7.9%, the best data for this period since 2014. There are currently 8.5 million workers in Brazil. People out of work, 13.8% less than a year ago.

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