Good morning! Today, a look at the GDP report released just minutes ago. Company indebtedness levels reach all-time record. And why new EU rules should worry Brazilian meatpackers.
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Breaking: GDP report shows slow growth
The Brazilian economy grew at a rate of 0.4 percent in Q3, coming in below expectations. According to a poll by Bloomberg, the markets’ median projection sat at 0.6 percent.
Why it matters. During Q3, the government injected boatloads of money into the economy by way of beefed-up social programs and moves to tame inflation. But double-digit interest rates (currently at 13.75 percent) and high inflation (which is slowing down but remains at 6.47 percent) offset the effects of the stimuli.
Glass half-full. The GDP is now 4.5 percent above pre-pandemic levels, with growth driven by the services sector (+1.1 percent) and industry (+0.8 percent). The latter was propped up by strong figures in the construction segment.
Glass half-empty. Agribusiness, on the other hand, experienced a 0.9 percent drop, its first negative result since Q3 2021.
Recovery....