Brazil GDP Q4 2018


Brazil: Growth slips through last year-end

February 28, 2019

Fourth-quarter national accounts revealed that Brazil’s two-year-old economic recovery stumbled through last year-end. Economic growth is estimated to have come in at a seasonally-adjusted 0.1% quarter-on-quarter, down from the third quarter’s 0.5% quarter-on-quarter outturn and well below analysts’ expectations.

Domestically, fixed investment fell sharply from a quarter earlier (Q4: -2.5% quarter-on-quarter s.a.; Q3: +5.5% qoq s.a.) amid plunging inventories and higher borrowing costs. Moreover, government spending fell (Q4: -0.3% qoq s.a.; Q3: +0.3% qoq s.a). Household spending, meanwhile, largely held up (Q4: +0.4% qoq s.a.; Q3: +0.5% qoq s.a) in line with the improving labor market and despite election-year political wrangling.

On the external front, growth of exports of goods and services moderated considerably (Q4: +3.6% qoq s.a.; Q3: +6.3% qoq s.a) amid regional tumult and an increasingly challenging economic backdrop. Imports of goods and services, on the other hand, contracted sharply (Q4: -6.6% qoq s.a.; Q3: +9.4% qoq s.a) in line with fewer receipts of machinery and equipment.

On an annual basis, growth slowed to 1.1% from 1.3% a quarter earlier.

LatinFocus Consensus Forecast panelists see growth at 2.4% in 2019, which is unchanged from last month’s estimate. For 2020, the panel sees the economy growing 2.5%.


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Brazil GDP Chart

Brazil GDP Q4  2018

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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