FGV GDP Monitor points to 0.9% growth in economic activity in August 2019
According to seasonally adjusted figures from the FGV GDP Monitor, economic activity in Brazil grew 0.9% in August 2019 compared with July, and there was growth of 0.6% on a moving quarterly basis (comparing June-August with March-May). Year-over-year, the economy expanded 0.2% in August but contracted 0.3% in the quarter ending in August.
Claudio Considera, the coordinator of the FGV GDP Monitor, says that the economy improved between July and August, thanks to growth in the three major types of economic activity. Although the economy expanded in the year to August, growth only occurred in agriculture and services. Over the same timeframe, manufacturing experienced its third consecutive decline, mostly explained by the poor performance of heavy manufacturing.
“These figures show that although the economy is growing in comparison between consecutive periods, it is unable to maintain a substantial growth rate compared with the same periods of 2018. As a result, there has been a downward trend in the 12-month accumulated rate since May of this year. In the space of four months, this indicator has almost halved, and accumulated growth until August was just 0.7%,” he says.
The 0.9% economic growth recorded in August, compared with July, was influenced by the performance of agriculture and manufacturing, which expanded 1.7% and 1.1%, respectively. The result for manufacturing was mainly due to extractive activities and power, which both grew more than 4% this month. The growth of extractive industry was associated with increased oil production and a recovery in iron ore output following a decline at the start of the year. Year-over-year, economic growth of 0.2% in August was mostly driven by agriculture and services. Despite this growth, it should be noted that key activities like heavy industry, retail and transport shrank in this period. In terms of demand, the only component that grew over the past 12 months was family consumption, which increased 0.3%.
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