From the Newsroom*
São Paulo – The growth in Brazilian Gross Domestic Product (GDP) reached 5.7% in the third quarter this year compared with the same period of last year. The figure was announced yesterday (12th) by the Brazilian Institute for Geography and Statistics (IBGE) and indicates that the country is going to close the year with an economic growth rate higher than 5%, which was the goal set by president Luiz Inácio Lula da Silva in the beginning of his current term. The 5.7% growth compared with July to September of last year is the highest recorded since the second quarter of the year of 2004, when the Brazilian economy had a growth rate of 7.8%.
Over twelve month period, ending in September, the GDP of Brazil grew 5.2%. In the accumulated result for the year, up to the ninth month, the national economy improved 5.3%. This was also the best accumulated rate since the third quarter of 2004. The production of wealth in the country totalled US$ 645.2 billion between July and September this year. According to data supplied by the IBGE, the main contributing factors to the performance were family consumption and investment. Consumption rose 6% in the third quarter this year compared with the same months of 2006, which was the best result in the last ten years. Investment increased 14.4%.
The president of the Brazilian Central Bank, Henrique Meirelles, stated that the result confirms the strong and sustained character of the current period of economic growth in Brazil. "This result is the most concrete evidence of resumption of confidence and the greater predictability that the Brazilian economy gained in recent years, thus allowing for an increase in production capacity, which in turn enables greater availability of goods and services, and well-being for the population," said Meirelles. To the president of the Central Bank, Brazil is reaping the fruits of economic stability.
The rise in investment during the third quarter of this year, in comparison with the same months of 2006, was the highest recorded since 1995. It was also the 15th consecutive quarterly increase. Investment accumulated a 12% expansion in the twelve-month period up to September, more than twice the increase in GDP posted over the same period of time. Therefore, investment represented 18.3% of the Gross Domestic Product in the third quarter of this year. This is also the highest percentage since the year 2000. According to the IBGE, the rise in investment was driven by the heating of domestic consumption and capital goods.
Of all sectors in Brazilian economy, the one that posted the greatest growth in the third quarter this year over the same period of 2006 was agriculture. GDP from agribusiness increased by 9.2% during the period. The second best performing segment was industry, at 5%. The third was services, which grew 4.8% over the third quarter last year. Agriculture and industry made strong contributions to the rise in investment witnessed in the country, mainly due to the purchase of machinery and equipment.
*Translated by Gabriel Pomerancblum
