The Brazilian economy grew 2,9% in 2023, according to IBGE.

247 - In the fourth quarter of 2023, Brazil's Gross Domestic Product (GDP) showed stability, closing the year with a growth of 2,9%, totaling R$ 10,9 trillion. The notable growth in agricultural activity stands out, registering an increase of 15,1% compared to 2022, exerting a significant influence on the overall GDP performance. In addition, growth was observed in industry (1,6%) and services (2,4%). GDP per capita reached R$ 50.194, reflecting a real advance of 2,2% compared to the previous year. The data were released by the Brazilian Institute of Geography and Statistics (IBGE) through the Quarterly National Accounts System, this Friday (1). 

Rebeca Palis, coordinator of National Accounts at IBGE, attributes the record in agriculture to growth in production and productivity gains in agriculture, overcoming the decline observed in 2022. "This behavior was largely driven by the growth of soybeans and corn, two of the most important crops in Brazil, which had record productions registered by the Systematic Survey of Agricultural Production (LSPA)."

Another positive factor contributing to the 2023 GDP result was the performance of the extractive industries, registering an increase of 8,7%. This growth was driven by increased extraction of oil, natural gas, and iron ore. Furthermore, it is important to highlight the performance of the electricity and gas, water, sewage, and waste management sectors, with an increase of 6,5%. "There were favorable water conditions, and the green flag was in effect throughout 2023. In addition, the 'El Niño' climate phenomenon increased the average temperature, impacting water and energy consumption," explains the researcher. The manufacturing (-1,3%) and construction (-0,5%) industries ended the year with declines.

In the services sector, all activities showed growth, with particular emphasis on financial activities, insurance, and services related to intermediation, with an increase of 6,6%. 

From a demand perspective, household consumption is the main influence on GDP. Household Consumption Expenditure stands out, having grown by 3,1% compared to 2022. The researcher explains that this result is influenced by improved labor market conditions, with increased employment and real wages, as well as a slowdown in inflation. "Government income transfer programs contributed significantly to the growth in household consumption, especially in food and essential non-durable goods."

There was a 3% drop in Gross Fixed Capital Formation, with a notable decline in machinery and equipment (-9,4%). Government Consumption Expenditure, however, grew by 1,7% during the year. Imports of Goods and Services fell by 1,2% in 2023, while Exports grew by 9,1%. "Here, we can see the influence of the growth in corn and soybean production and the extraction of oil and iron ore, important national commodities," Rebeca points out. In 2023, the investment rate reached 16,5% of GDP, lower than that recorded in 2022. In turn, the savings rate stood at 15,4% in 2023, compared to 15,8% in the previous year.

Of the total GDP of R$ 10,9 billion in current values, R$ 9,5 billion corresponded to Value Added at basic prices, while R$ 1,4 billion was attributed to Taxes on Products net of Subsidies.

In the fourth quarter of 2023, GDP remained stable (0,0%) compared to the third quarter. By sector, industry grew by 1,3%, while services showed a variation of 0,3%. Agriculture registered a 5,3% decline, influenced by the concentration of harvests in the first half of the year. Among industrial activities, notable growth occurred in extractive industries (4,7%), construction (4,2%), and electricity, gas, water, sewage, and waste management activities (2,8%). However, manufacturing industries showed a negative variation of 0,2%.

In the services sector, there were positive rates in groups such as "other service activities" (1,2%), financial, insurance and related services (0,7%), real estate activities (0,1%), and public administration, defense, public health and education, and social security (0,1%). On the other hand, a decrease was observed in trade (-0,8%), transport, storage and mail (-0,6%), and information and communication (-0,1%).

From a demand perspective, there was growth in Gross Fixed Capital Formation and Government Consumption Expenditure (both at 0,9%), while Household Consumption Expenditure registered a negative variation of 0,2%.

With regard to the external sector, exports of goods and services remained practically stable (0,1%), while imports of goods and services showed an increase of 0,9% compared to the previous period.