The Brazilian economy exceeded economists' expectations and grew by 2.9% in 2023. On Friday (March 1st), the Brazilian Institute of Geography and Statistics (IBGE, in Portuguese) released the country’s gross domestic product (GDP).
GDP is the sum of all national production during the year. It's the main indicator of a country’s economic activity.
According to IBGE, Brazil’s GDP has reached over US$ 2,2 trillion in 2023. GDP per capita – production value per inhabitant – was US$ 10,138, a rise of 2.2% compared to 2022 and after inflation was deducted.
Growth was mainly driven by the agricultural sector. In 2023, production rose by 15.1%. In the industrial sector, the increase was 1.6% and, in services, 2.4%.
The agribusiness growth had to do with record soybean and corn harvests in 2023. According to IBGE, these crops' production rose by 27% and 19%, respectively.
Rise in consumption
GDP can also be measured by consumption and expense numbers. From this perspective, families’ consumption played a crucial role in economic growth.
According to IBGE, consumption rose by 3.1% in 2023. Government consumption rose 1.7%. Gross Fixed Capital Formation (GFCF), an indicator of business investment, fell by 3%. Exports grew by 9.1%, while imports fell by 1.2%.
Slowdown
IBGE pointed out that the national economy didn’t grow in the last quarter of 2023 compared to the previous quarter. That indicates that annual growth is mainly related to the increase in production recorded at the beginning of the year.
Even so, the annual result is much higher than that estimated for 2023 by economists linked to banks at the beginning of last year.
They estimated that the Brazilian economy would grow by 0.8% in 2023. This estimate was published in the December 30 edition of the Focus Bulletin, released by the Central Bank.
