GDP Monitor points to 0.1% growth in economic activity in October 2023

Based on seasonally adjusted data, FGV’s GDP Monitor points to 0.1% growth in economic activity in October compared to September. Year-over-year, the economy grew 2.4% in October and 2.0% in the three months to October. In the 12 months to October, the economy expanded 2.9%.

“After two consecutive months of contraction, economic activity increased 0.1% in October compared to September. This was due to positive contributions from industry and services. On the demand side, a 0.5% drop in household consumption stands out after four consecutive months of growth, including declines in all the consumption categories analyzed. It’s possible that this result is a one-off, but it is noteworthy given the weight of consumption in GDP and the positive influence it has had on the economy’s performance in 2023,” says Juliana Trece, the coordinator of the GDP Monitor.

Disaggregated analysis of demand components

Disaggregated graphic analysis of demand components was based on the annualized quarterly series, as it is less volatile than the monthly and seasonally adjusted data, allowing a better understanding of the trajectory of components.

Household consumption

Household consumption increased 2.6% in the three months to October. After the significant growth recorded in 2022, household consumption showed stable growth of around 3.5% per quarter in 2023. However, the result for the three months ending in October shows a slowdown in the pace of growth, with a reduction in the contribution of all consumption categories. Even so, with the exception of the consumption of semi-durable goods, all the other consumption categories grew.

Gross fixed capital formation

Gross fixed capital formation shrank 6.2% in the three months to October. This is explained by declines in the machinery and equipment and construction segments. However, the negative contribution from construction was only 0.8 percentage points, compared to 5.7 percentage points from machinery and equipment. As commented on in previous editions of the GDP Monitor, the whole of the machinery and equipment segment has been performing poorly, especially the truck, bus and related items category.

Exports

Exports of goods and services grew 11.4% in the three months to October. Once again, as observed throughout 2023 and commented on in previous editions of the GDP Monitor, exports of agricultural products and minerals explain the strong performance of exports. It should be noted that the contribution of crop and livestock farming has increased over the year, from 4.7 percentage points in the three months to May to 7.3 percentage points in the three months to October.

Imports

Total imports decreased 5.4 percentage points in the three months to October. The strong negative performance of intermediate goods since the middle of the year is mainly responsible for this sharp drop in imports.

GDP

In monetary terms, it is estimated that Brazil’s gross domestic product amounted to R$8.949684 trillion between January and October, in current prices.

Investment rate

Graph 7 of the press release highlights the average investment rates in two lines: the orange line (on top) shows the average monthly investment rate since January 2000 (17.9%), while the gray line (below) shows the average monthly investment rate since January 2015 (16.4%). It can be seen that the investment rate in October 2023 was 17.1%, slightly above the average monthly rate seen since 2015 but below the average rate since 2000.

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