Brazil’s statistical bureau (IBGE) announced today that Brazilian GDP growth in 2010 was 7.5%, compared to 2009. In its report the IBGE admitted that the bar was low after 2009 GDP fizzled due to the Great Recession and came in at -0.6%.
The 2010 GDP growth is the highest GDP growth since 1986 (when it also was 7.5%).
In nominal terms, the value of all of Brazil’s goods and services in 2010 was 3.675 trillion reais (US$ 2.22 trillion). Growth, says the IBGE, was boosted by an average rise of 6.7% in so-called basic prices (although official inflation was less) and an increase of 12.5% in taxes.
“The 2010 growth rates demonstrate that the Brazilian economy is growing at a significant and sustainable pace, which supports the country’s plans for long-term investment projects”, said Finance Minister Guido Mantega.
“The performance of gross fixed capital formation and the domestic market, along with a low and stable inflation rates, suggest that high levels of growth will be maintained over the coming years.
“Brazil’s economic growth figures are now in a process of accommodation, after an exceptional recovery from the global financial crisis of 2008 and 2009. We expect GDP to grow around 4.5 to 5.0 percent in 2011, a rate that would be sustainable and generate no inflationary pressures,” commented Mr. Mantega.
Meanwhile, industrial output jumped 10.1%, boosted by strong performances in mining – commodities – (up 15.7%) and civil construction (up 11.6%).
Production in the farm sector – more commodities – rose 6.5%, led by soy (up 20.2%), wheat (up 20.1%), coffee (up 17.6%), corn (up 9.4%) sugarcane (up 5.7%) and oranges (up 4.1%).
The services sector rose 5.4%, led by the financial and insurance segments. The commercial sector had solid growth of 10.7%.
The IBGE says that family consumption rose for the seventh consecutive year; in 2010, it was up 7%. Government procurement was up 3.3%.
Gross fixed capital formation in 2010 rose a sharp 21.8%, the highest annual result since the IBGE began keeping records in 1996.
In foreign trade, exports rose 11.5% and imports were up 36.2%.
Fourth Quarter of 2010
Minister Mantega commented that “the figures for the fourth quarter of 2010 demonstrate that there are no signals of overheating in the Brazilian economy at present.”
The 0.7 percent GDP growth recorded in the last quarter of 2010 over the previous quarter (in seasonally adjusted series) reflects a 1.0 percent increase in the service sector, a 0.3 percent decrease in the industry sector and a 0.8 percent contraction in the agriculture sector.
A comparison between the fourth and third quarters of 2010 also shows that gross fixed capital formation decreased 0.7 percent, household consumption rose 2.5 percent and government consumption recorded a 0.3 percent contraction.
“There was also, in the fourth quarter of 2010, a better balance between the export and import of goods and services,” said Minister Mantega. Exports rose by 3.6 percent and imports by 3.9 percent in the fourth quarter of 2010 as compared to the third quarter.