Business

What Brazil’s Q2 GDP numbers tell us. And what they don’t

The Brazilian economy has posted positive numbers for the past four quarters. But today's growth masks tomorrow's fiscal crisis

What Brazil's Q2 GDP numbers tell us. And what they don't
A steady recovery in labor market conditions combined with short-term fiscal stimulus should soften the blow of a decelerating economy. Photo: Rivaldo Gomes/Folhapress

Latin America’s largest economy has been outperforming forecasts since the beginning of the year. In Q2 2022, Brazil’s GDP grew by 1.2 percent — exceeding analysts’ 0.9-percent prediction. 

The positive numbers are the result of a combination of extraordinary factors that heated up the economy, including government aid measures, commodity price shocks, and high savings levels driven by the pandemic.

Brazil’s official statistics agency IBGE also revised Q1 GDP growth from 1 to 1.1 percent. In total, gross domestic product reached BRL 2.4 trillion (USD 461 billion), against BRL 2.2 trillion in Q1, in current values.

The latest GDP reading...

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