Brazil’s economy grew by 0.2% in Q4 2024, falling short of 0.5% expectations and down from 0.7% in Q3. Industrial output was driven by a 2.5% increase in construction, while service sector growth was modest. Demand factors included a rise in fixed investment and government spending, counteracting a decline in household consumption. Net trade positively impacted GDP with growing exports.

In the last quarter of 2024, Brazil’s economy experienced a growth of 0.2% compared to the previous quarter. This figure represents a decrease from a previously reported growth rate of 0.7% and does not meet the market’s expectations of a 0.5% increase.

Within the industrial sector, output increased by 0.3%. This growth was primarily fueled by construction, which saw a rise of 2.5%, while manufacturing and mining expanded by 0.8% and 0.7%, respectively. In contrast, the services sector experienced a modest gain of 0.1%, with significant contributions from transportation and storage (0.4%) and trade (0.3%).

On the demand front, improvements in fixed investment, which increased by 0.4%, and government spending, which rose by 0.6%, helped mitigate a pronounced decline in household consumption, which fell by 1.0%. Additionally, net trade positively impacted GDP, with exports growing by 1.3% and imports decreasing by 0.1%.

In conclusion, Brazil’s economic growth in Q4 2024 was lower than anticipated at 0.2%, indicating a slowdown from the prior quarter’s performance. Key sectors such as construction and trade contributed positively, yet the decline in household consumption negatively impacted overall demand. Despite these challenges, improvements in net trade provided some support to the economy. The overall economic outlook suggests caution moving forward, as growth remains below market expectations.

Original Source: www.tradingview.com