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Brazil: GDP accelerates meagerly in Q4, records growth for 2014

March 27, 2015

In the fourth quarter, GDP rose 0.3% over the previous quarter in seasonally-adjusted terms (Q3: 0.2% quarter-on-quarter), which marked the second consecutive expansion and beat the 0.2% increase that market analysts had expected.

Private consumption rose from a 0.4% gain in Q3 to a 1.1% expansion in Q4. In addition, fixed investment improved from a 0.5% contraction in Q3 to a 0.4% decrease in Q4. Conversely, government consumption fell 0.6% which contrasted Q3’s 0.9% rise.

On the external side of the economy, exports of goods and services contracted a significant 12.3% in Q4, which notably contrasted Q3’s 1.4% expansion. Imports fell 5.5% over the previous quarter, also contrasting the 1.4% rise recorded in the previous period. As a result, the external sector deteriorated significantly from a minus 1.9 percentage point contribution in Q3 to a minus 10.7 percentage point contribution in Q4.

On an annual basis, the economy contracted 0.2% in Q4 compared to the same quarter of the previous year, which was an improvement from the 0.6% decrease tallied in Q3. For the full year 2014, GDP expanded a meager 0.1%. The 2014 growth figures were calculated under a new methodology.

The Central Bank expects GDP to grow 0.3% in 2015 and accelerate to a 1.5% expansion in 2016. LatinFocus Consensus Forecast panelists expect the economy to expand 0.6% in 2015, which is down 0.5 percentage points from last month’s estimate. For 2016, the panel sees GDP growth at 1.5%.down 0.2 percentage points.


Author: Angela Bouzanis, Senior Economist

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Brazil GDP Q4 2014

Note: Quarter-on-quarter changes of seasonally adjusted GDP and year-on-year variation in %
Source: Brazilian Institute of Statistics and Geography (IBGE) and FocusEconomics Consensus Forecast.


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