With New Methodology Brazil’s 2006 Growth Jumps from 2.9% to 3.7%

Brazil's IBGE, the Brazilian Institute of Geography and Statistics disclosed today, March 28, the revision of the Gross Domestic Product (GDP) for 2006. With the new calculation method adopted, the growth in Brazilian economy rose from 2.9% to 3.7% and reached US$ 1.1 trillion (2.3 trillion reais).

The per capita GDP increased by 2.3% during the same period, to reach approximately US$ 6,000 (12,400 reais).

The IBGE also revealed the GDP revision for each quarter of 2006. In the fourth quarter, there was a decrease from 1.1% to 0.9%; in the third, an increase from 0.8% to 2.6%; in the second, a reduction from 0.6% to -0.5%; and in the first, an increase from 1.2% to 1.6%.

One week ago, the institute disclosed the GDP revision for 2002 to 2005. For all years, the new result showed a higher growth than that of the previous calculation. The new method uses a larger number of sources of information, and takes into account 293 products and 149 economic activities.

According to the IBGE, consumption by Brazilian families in 2006 saw a 4.3% increase over 2005. It was the third year in a row with a positive result. Government consumption also rose (3.6%), as did investments (8.7%).

Exports of goods and services increased by 4.6%, and imports grew 18.1%. Agriculture saw a 4.1% growth, recovering from the previous year, when it grew by just 1%. The industry that grew the most was mineral extraction (6%), highlighting oil and gas extraction (5.1%) and iron ore (10.9%).

The greatest increases in the service sector were recorded in the activities of financial intermediation, complementary social security, and wholesale and retail trade.