Dec 6, 2011

Brazil: GDP 3rd Quarter 2011

The Brazilian GDP was flat in the third quarter of 2011 compared to the previous quarter. On the demand side, gross fixed capital formation (GFCF), household and government expenditure had negative contribution, being offset by the positive contribution of the external sector. Regarding the third quarter of 2010, growth was 2.1%, and household consumption and GFCF rose by 2.8% and 2.5% respectively. In the chart below, we can see how the main accounts of the Brazilian GDP during recent period. In the period since December 2007, both household expenditure and GFCF grew up above GDP index. The negative contribution is due to foreign trade , where the appreciation of exchange rate led the contribution of imports in GDP to grow 48% in this period.

Opinion: The GDP growth in the third quarter was weak, which should reduce the forecast for growth in 2011. However, the impact of the crisis of Europe in the Brazilian growth is still very weak, because we do not see significant restrictions on foreign credit and also the prices of relevant commodities such as iron ore, are still high. I believe that if the crisis deepe in Europe, the scenario for the Brazilian economic growth will be very bad.

Source: IBGE

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