Brazil: Economy slows substantially in 2011
March 6, 2012
In the fourth quarter, GDP increased 0.3% over the previous quarter in seasonally adjusted terms, which contrasted the revised 0.1% drop observed in the third quarter (previously reported: 0.0% quarter-on-quarter). Compared to the same quarter last year, the economy added 1.4%, down from the 2.1% increase tallied in the third quarter and below market expectations of a 1.6% rise. In the full year 2011, the economy expanded 2.7%, well below the 7.5% increase observed in 2010. The fourth quarter figure mainly benefited from stronger consumption of Brazilian households. Private consumption rebounded from a 0.1% contraction in the third quarter to a 1.1% increase in the fourth. Government consumption rose 0.4% in the fourth quarter, contrasting the 0.8% contraction in the third. Finally, fixed investment added 0.2% (Q3: -0.4% qoq). On the external side of the economy, exports of goods and services increased 1.8% in the fourth quarter (Q3: +1.9% qoq) while imports rebounded from a 0.5% decline in the third quarter to a 2.6% expansion in the fourth. The Central Bank expects GDP to grow 3.5% in 2012.