São Paulo – The Gross Domestic Product at market prices (GDPmp) of the state of São Paulo was up 0.6% in the first quarter of this year as against the immediately preceding quarter. According to figures issued this Wednesday (4) by the State Data Analysis System Foundation (Seade), factors which contributed to the result included the 0.4% increase in Value Added at basic prices (VAbp) and the net taxes on subsidies which were up 0.8%.
Economically speaking, São Paulo is the most important state of Brazil. For comparison purposes, the Brazilian GDP was up 0.2% in the first quarter, according to the Brazilian Institute of Geography and Statistics (IBGE).
The figures show that the main contributing factor to the increase in VAbp during the quarter was the positive performance of industry (1.1%) and services (0.3%). Agricultural performance was down 3.4%.
In the industrial sector, the rate was driven mainly by the processing industry (1.1%) and by production and distribution of electricity, gas, water, sewage and urban cleaning (2.4%). In services, the increase was mostly due to good performance in trade (3.3%) and transports (3.0%). The decline in agriculture is linked to the reduced productivity of soy (2.6%).
Compared with the first quarter of last year, the GDPmp was down 1.5%. The VAbp was up 1.6%, and net taxes on subsidies were up 1.1%. In the last 12-month period compared with the preceding 12-month period, the rate was positive (2.3%), as a result of the 2.4% increase in VAbp and the 2.0% increase in net taxes on subsidies.
According to Seade’s head of Economic Analysis, Vagner Bessa, the GDP of São Paulo has been higher than Brazil’s for three quarters now, although it has dropped for the fifth consecutive quarter, having gone from 5.9% in the first quarter of last year to the current 2.3%. It is a process of slowing down seen worldwide, including Brazil, and now it is arriving at São Paulo, he explained.
According to Bessa, the first quarter figures will provide a template for how São Paulo’s economy will behave from now on. He stressed that no single sector is able to express the situation of the state, and emphasized the influence of the foreign scenario. “São Paulo’s products and industrialized, and consumed by industrialized countries. The rate of growth of those countries is determinant to what will happen in the economy of São Paulo.”
To him, the logic of growth of the São Paulo economy stands apart from the national logic, and projections for the remainder of the year are difficult to make. “If the state grows by 2%, it then is not stagnant. Looking at the level of economic activity that we have right now, an increment of this magnitude is quite significant considering the recessive world economy.”
*Translated by Gabriel Pomerancblum
