Construction and Farming Weigh Heavily on Brazil’s 6% GDP Growth

Construction in São Paulo, Brazil Farming, civil construction and government expenses have boosted the growth of the Gross Domestic Product (GDP) of Brazil, the country's wealth. The GDP grew 6.1% in the second quarter of 2008, when compared to the same period last year.

According to information disclosed this Wednesday, September 10, by the Brazilian Institute of Geography and Statistics (IBGE), livestock farming was a highlight, growing 7.1%, boosted by coffee, corn and rice, mainly.

Then, still on the side of offer, came the growth of services (5.5%) and industry (5.7%). The latter, influenced by the advance of civil construction (9.9%), was boosted by government expenses with works, like the Growth Acceleration Program (PAC).

The result was also influenced by investment in fixed capital, which has been growing for 12 years. With regard to the first half, the growth has been 5.4% and in comparison with the same period in 2007, 16.2%.

According to IBGE economist Rebeca Palis, the growth in investment was boosted by the import of machinery and equipment, which grew, mainly, due to the end of the Internal Revenue Service strike, early this year.

In the optic of demand, the growth of public investment in the second quarter was a highlight (5.3% growth) when compared to the same period in 2007. The IBGE economist explained that governments (federal, state and municipal) spent more due to the hiring of personnel, which is restricted in election years.

"As the law says that mayors cannot spend and hire people three months prior to elections, the rulers end up anticipating their hiring. Civil construction, the PAC and others have also boosted the civil construction boom and helped expand the rate of growth of the GDP."

Palis also said that although there was not "very high rate of growth" in the second half, public administration posted great weight, around 15% of GDP.

The consumption of families also grew from one year to the other. In a comparison between second quarters, family consumption rose 6.7%, presenting the 19th consecutive growth. With regard to the first quarter of 2008, it was practically stable, with 1% variation.

ABr

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