GDP grows 1.1% and closes 2019 at R$7.3 trillion

It was the third year with a positive result, after increases of 1.3% in 2017 and 2018. GDP per capita varied by 0.3%, in real terms, reaching R$ 34,533 in 2019.

“These are three years of positive results. However, GDP has not yet offset the decline seen in 2015 and 2016 and is at the same level as the first quarter of 2013. The biggest contribution to GDP growth comes from household consumption, which grew by 1.8%. On the supply side, the highlight was the services sector, which represents two-thirds of the economy,” notes Rebeca Palis, coordinator of the IBGE’s National Accounts.

Rebeca explained that the inclusion of data from the external sector, sent late in the third quarter, did not impact the GDP result in 2019. “It only affected exports, as the external sector continued to contribute negatively. While domestic demand contributed 1.7% of the result, the external sector showed a drop of 0.5%”, she explained.

The services sector grew by 1.3%, followed by information and communication activities (4.1%), real estate activities (2.3%), trade (1.8%), other service activities (1.3%), financial activities, insurance and related services (1.0%) and transportation, storage and mail (0.2%). The activity of administration, defense, public health and education and social security (0.0%) remained stagnant in the year.

In the industrial sector, electricity, water, gas, sewage, and waste management activities grew 1.9% compared to the same period in 2018, driven by the 1.6% growth in construction. The negative partial occurred in extractive industries, with a drop of 1.1% in the year. Manufacturing industries remained stable at 0.1%.

“The industry behaved differently compared to 2018, driven by growth in construction, after five years of negative performance. The manufacturing industry, which had grown more in 2018, stagnated in 2019,” explained Rebeca Palis.

In agriculture, which has a weight of only 5% in the calculation of GDP, cotton (39.8%), orange (5.6%) and bean (2.2%) crops stood out. Corn crops recorded good growth of 23.6% and significant productivity gains; there was a negative variation in crops such as coffee (-16.6%), rice (-12.6%), soybeans (-3.7%) and sugarcane (-1.0%). In livestock, performance in 2019 was positively influenced by the closer trade relationship with China, due to swine fever in the Asian country.

The investment rate in 2019 was 15.4% of GDP, slightly above that observed in the previous year (15.2%). The savings rate was 12.2% in 2019, 2% less than in 2018.

Regarding domestic demand, there was an increase of 1.8% in household consumption and 2.2% in gross fixed capital formation. Government consumption fell by 0.4%.

In the fourth quarter of 2019, GDP grew by 0.5% compared to the third quarter of the year. This is the ninth consecutive positive record in this comparison. Services and industry had positive variations of 0.6% and 0.2%, respectively. While agriculture and livestock farming had a decline of 0.4%. Compared to the fourth quarter of 2018, GDP grew by 1.7%, its twelfth consecutive positive result, after eleven quarters of decline in this same comparison basis.