Understand the GDP of the 1st quarter in 5 points, quiz of the news of the week and what matters in the market

ANDsta is this Friday’s edition of the FolhaMercado newsletter (3). want to receive it from monday to Friday at 7 am In your email? Sign up below.

Brazil’s GDP performance in the first quarter, billionaire business in the energy sector..Take the quiz and test if you are aware of the news that moved the market this week:

Understand GDP performance in 5 points

Brazil’s GDP grew 1% in the first quarter of this year in relation to the previous three months, informed this Thursday (2) the IBGE.

In numbers: the high came a little below the median of market expectations, which was 1.2% in the Bloomberg survey. In the period, GDP was 1.6% above the pre-pandemic level. See the performance of other countries here.

What is it for: the indicator helps to measure the volume of wealth produced in a given period. The calculation considers products, services, rents, utilities, taxes and even contraband.

five points to understand the performance of GDP in the 1st quarter:

1. Services: responsible for around 70% of the indicator, led to a rise in GDP, with growth of 1%. The sector suffered the most at the height of the pandemic and has now benefited from the return of activities.

• Highlight for “other services”, with high 2.2%which include activities provided to families, such as hotels, restaurants, bars, beauty salons, etc.

two. Consumption from families: the main one in terms of demand had a high of 0.7%also fueled by the return of face-to-face activities, such as those related to travel.

• Government programs to encourage consumption, such as FGTS withdrawal, anticipation of the 13th of the INSS and increase in the amount of Auxílio Brasil also helped.

3. Agribusiness: the sector that suffered the least during the height of the health crisis is now accumulating losses from damage caused by the climate. In the quarter, it fell 0.9%.

• The drought in the South mainly affected the soybean crop, one of the most important for the country. The fall in agricultural GDP comes at a delicate moment for the sector, analyzes columnist Mauro Zafalon.

4. Industry: remained stagnant, with a variation of 0.1%. The weather, in this case the rains in the Southeast, held back the momentum of the sector by retracting the mining sector (-3.4%), especially iron ore.

5. Investments: measured by GFCF (Gross Fixed Capital Formation), fell 3.5% and indicate a brake on the economy for the future, with companies holding cash in an environment of high interest rates.

And from now on?

The GDP performance in the first quarter made banks improve their forecasts for the year, but the signs for the second half are not so positive.

What explains: the effects of the retraction caused by the increase in Central Bank interest rates should only be felt by economic activity in the second half of the year.

• According to analysts and the BC itself, the interest rate hike takes six to nine months to reach the economy.

• The Selic passed to a level of brake of the economy in October of last year and reached the double digits in February of this year.

Analysis:

• It is true that the economy brought positive news, but this optimism will be challenged in the second half of the year, writes Eduardo Jarra, chief economist at Santander Asset Management.

• The rise in commodity prices, the reopening of the economy and fiscal stimuli contributed to GDP growth, but the fall in investment beyond expectations is a bad sign, says Silvia Matos, economist and researcher at FGV Ibre.

Breakfast: why economy should cool down after GDP rises; listen to podcast.

take a break

• To watch “Hacked Privacy” – on Netflix.

The documentary explains the case of Cambridge Analytica, which used data from social media users to send political ads capable of tapping into voters’ feelings such as fear and anger.

The company worked for the pro-Brexit and Donald Trump campaigns in 2016.

Why it’s featured now: it was from this scandal that the head of operations and Mark Zuckerberg’s right-hand man at Meta, Sheryl Sandberg, began to lose her influence in the company. She announced on Wednesday (1) that she is leaving the company.

• The billionaire himself internally blamed the executive for the episode and began to assume part of her duties, according to the Wall Street Journal.

• Sandberg was responsible for developing Facebook’s advertising business when the social network was still in its infancy.

In addition to the economy:

• Sheet Guide: June festivals return to SP with queues, corn and quentao; see schedule.​