Brazil’s Gross Domestic Product (GDP) – the total of goods and services produced in the country – ended up 2004 with growth of 5.2% compared to the previous year, the highest annual rate since 1994 ( 5.9%). In the final quarter of 2004, the GDP increased 0.4%.
The sector that contributed the most to GDP growth was industry (6.2%), followed by agriculture (5.3%) and services (3.7%).
According to the Brazilian Institute of Geography and Statistics (IBGE), the overall rate is the result of a 4.8% increase in the Value Added to Basic Prices (income produced by economic activity) and an 8.5% increase in taxes on products.
With this economic growth, the per capita GDP (the share of the GDP corresponding to each of the country’s inhabitants) rose 3.7%, also the biggest increase since 1994 ( 4.2 %).
The IBGE data also indicate that over the past decade (1995-2004), the average annual growth of the GDP was 2.4% and of the per capita GDP, 0.9%.
At the end of last year, the president of Brazil’s Central Bank (BC), Henrique Meirelles, considered normal the zero growth in the Gross Domestic Product (GDP) in the final quarter of 2004, following a big increase in the third quarter of the year.
The GDP corresponds to the wealth generated by the country. “This is a phenomenon of things settling in place. Completely normal in every process of renewed growth. This is significant, and it is healthy,” he commented.
In Meirelles’s view, the basic fact is that the economy grew over 5% last year. In his opinion, what is important is that “we project a growth of 4% in 2005, something that was never even entertained in general terms as a possibility by analysts.”
He explained that the fact that the growth rate was nil doesn’t mean that the economy stopped growing. It occurred simply as a process of stabilization in relation to the third quarter.
Translation: David Silberstein