Brazil GDP


Economy grows at fastest pace in 25 years

In the fourth quarter, GDP increased a seasonally adjusted 0.7% over the previous quarter. The reading represented an acceleration compared to the 0.4% growth in Q3 but came in slightly below market expectations of a 0.8% expansion. On a year-on-year basis, the economy expanded 5.0% in the final quarter of the year (Q3: +6.7% year-on-year). The acceleration over the previous quarter reflected resilient private consumption and a more favourable contribution from the external sector to overall economic growth. Private consumption accelerated from 1.8% in Q3 to 2.5% in Q4. In contrast, both government consumption and fixed investment decelerated over Q3. Investment expanded a dismal 0.6% in the fourth quarter, following on the more robust 3.1% expansion in the third quarter. Exports of goods and services rose 3.6% in Q4 (Q3: +4.2% quarter-on-quarter), while imports increased 3.9% (Q3: +7.1% qoq). Owing to the stronger deceleration in imports, the contribution from the external sector to overall economic growth improved somewhat but remained negative. In the full year 2010, the economy expanded 7.5%, which marked the fastest pace in 25 years and represents a strong rebound from the 0.6% contraction tallied in 2009.

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