Brasília – According to the Brazilian Ministry of Finance, the 0.1% increase in Gross Domestic Product (GDP) in Q3 from Q2 is proof that the economy is swinging back to growth, albeit modestly. In a press statement, the ministry has also reported a pickup of 1.7% in industry and 1.3% in investment.
“Past and current indicators indicate that this upward trend should persist into Q4. The resumption of investment is crucial in order for economic growth to accelerate and be sustained over time,” the statement reads.
Another highlight, the ministry said, is the fact that the 1.9% decline seen in agriculture in Q3 was mostly caused by prolonged drought, which has affected relevant crops such as sugarcane and coffee.
The ministry also remarks that domestic demand has weakened in Q3, when family consumption was down 0.3%, reflecting scarce credit stemming from a restrictive monetary policy designed to keep inflation at bay. “It is important to note that credit is beginning to show signs of improvement, but remains insufficient when it comes to bringing family consumption growth rates back to normal.”
The statement also highlights the low unemployment rate in Brazil, at 4.7% in October, the lowest since records started being kept, and the continuing increase in workers’ income. To the ministry, this means the total wages paid have kept growing, even though domestic market performance is being held back by the dearth of credit availability.
“The successful performance of Brazil’s labour market is the result of an anti-cyclical economic policy, which has mitigated the impact of the slowdown of the global and domestic economies on workers,” the statement reads.
The ministry has also stated that the Brazilian economy has sound macroeconomic foundations and possesses all necessary conditions to post stronger growth in Q4 and throughout 2015, improving the conditions for Brazil’s population even further, especially for the workers and lower income brackets.
*Translated by Gabriel Pomerancblum