Economy

What factors impact the Brazilian GDP?

After eight straight quarters of slim, but steady growth, the Brazilian GDP figures after Q1 2019 came as expected: showing that the country’s economy has contracted, starting off 2019 on the wrong foot. According to the Brazilian Institute of Geography and Statistics, the Brazilian economy shrank by 0.2 percent in the first three months of the year.

The figures come as a hit to President Jair Bolsonaro’s administration, which took office on January 1 promising a swift agenda of pro-market reforms that would quickly unclog investments in the country. Instead, uncertainties around Brazil’s political and economic environment hover around the administration—which has been incapable of passing its agenda in Congress.

As expected, the extractive sector had a dreadful performance (-6.3 percent), in the aftermath of the Brumadinho dam collapse on January 25. Following the disaster that killed 243 and left 27 people missing, Vale—the world’s largest iron ore producer—triggered a plan to decommission several of its mines, which took a toll on industrial output.

The services sector—which has...

Natália Scalzaretto

Natália Scalzaretto has worked for companies such as Santander Brasil and Reuters, where she covered news ranging from commodities to technology. Before joining The Brazilian Report, she worked as an editor for Trading News, the information division from the TradersClub investor community.

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