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Brazil: GDP decelerates in Q1 2014

May 30, 2014

In the first quarter, GDP increased 0.2% over the previous quarter in seasonally-adjusted terms, marking a deceleration from the 0.4% expansion registered in Q4. The result met market expectations. The deceleration was the result of a deterioration in both domestic and external demand.

Domestic demand contracted 0.6% in Q1 (Q4 2013: +0.1% quarter-on-quarter), which marked the worst result since Q1 2009. Fixed investment contracted 2.1% in Q1, which was down from the 1.2% contraction tallied in the previous quarter. Private consumption also deteriorated in Q1; it contracted 0.1% over the previous quarter (Q4: +0.9% quarter-on-quarter). Government consumption continued to expand, although it decelerated from the 0.9% expansion seen in Q4 to a 0.7% rise in Q1.

On the external side of the economy, exports of goods and services contracted 3.3% in Q1, which markedly contrasted the 3.6% expansion tallied in Q4. Conversely, imports rose 1.4% over the previous quarter, which contrasted the 0.4% decrease recorded in the previous period.

The economy added 1.9% in Q1 compared to the same quarter last year, which was down from the revised 2.2% increase tallied in Q4 (previously reported: +1.9% year-on-year).

The Central Bank expects GDP to grow 2.3% in 2014 according to its Inflation Report from March. LatinFocus Consensus Forecast panelists expect the economy to expand 2.1% in 2014, which is unchanged from last month’s estimate. For 2015, the panel sees GDP growth at 2.2%.


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Brazil GDP Q1 2014

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


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