Rio de Janeiro, (EFE).- The Brazilian economy grew by 2.9% in 2022 and chained two consecutive years of expansion, driven by the service sector, the Government reported Thursday.
The result reflects the slowdown of the strongest economy in Latin America after rebounding 5.0% in 2021, after the impact suffered by the crisis of the covid-19 pandemic in 2020, when it fell 3.3%.
According to the report released by the Brazilian Institute of Geography and Statistics (IBGE), the country’s growth fell by 0.2% in the last quarter of the year compared to the third, but advanced by 1.9% compared to the same period of 2021.
The data is compatible with the projections of market analysts who indicate that the Brazilian economy will continue its slowdown in 2023, by which time they expect the country’s Gross Domestic Product to advance by 0.84%.
Growth is driven by services
Brazil’s growth was mainly driven by the services sector, responsible for about 70% of the country’s GDP, which expanded by 4.2% last year. The industry also weighed, which advanced by 1.6%.
The two sectors represent 90% of the indicator.
“Of the growth of 2.9% in 2022, services were responsible for 2.4 percentage points. In addition to being the sector with the greatest weight, it was the one that grew the most, which shows how high its contribution to the economy was in the year,” said Rebeca Palis, coordinator of National Accounts at IBGE.
The agricultural sector, on the other hand, fell 1.7% due to the decrease in production and was impacted by soybeans, the main product of the Brazilian crop, which had an estimated drop of 11.4%, due to the adverse effects of the weather .
Inflation weighs down the South American giant
Growth in Brazil has been weighed down by the sharp rise in interest rates to curb inflation, which reached above double digits, although it closed the year at 5.79%, still above the target set by the Central Bank.
The rates have remained at 13.75% since last June, the highest level in the last six years, which has generated harsh criticism of the Central Bank by the Government of Luiz Inácio Lula da Silva, who assumed power on 1 last January and wants to reinvigorate growth.
Experts anticipate that even if the rates are reduced, they will remain high for the pocket of Brazilians, with which family consumption, the main engine of the economy, will continue to be weakened.
According to the IBGE, family consumption grew 4.3% last year, while that of the Government rose 1.5%.
The growth of the Brazilian economy last year was also driven by exports, which increased 5.5%.
Among the most outstanding activities were other services (+11.1%) and transport, storage and mail (+8.4%), as well as information and communication (+5.4%).
