GDP was affected by climatic factors, says Ministry of Economy

The Ministry of Economy said on Thursday (2), in a note that analyzes the drop in GDP (Gross Domestic Product) in the third quarter, that adverse climatic factors of nature had an impact on the performance of the activity.

“It is essential to distinguish what is economic policy from adverse and punctual climatic factors of nature”, says the SPE (Secretary of Economic Policy) of the ministry. “The biggest water crisis in 90 years of history and the occurrence of severe frosts had an impact both on energy-intensive sectors and on sectors that depend on the climate, such as agriculture”, he says.

According to the secretariat, there was a strong increase in production costs such as fertilizers, fertilizers and pesticides, which also affected the numbers of agriculture.

Agribusiness dropped 8% against the immediately previous quarter. If the field had zero variation, says the SPE, GDP would grow at least 0.3% in the period.

In total, the Brazilian economy retreated 0.1% in the third quarter of 2021, compared to the three immediately previous months, show GDP (Gross Domestic Product) data released this Thursday (2nd) by the IBGE (Brazilian Institute of Geography and Statistics ).

On the other hand, the SPE highlights that there is a recovery in the services sector, which grew 1.1% in the period, “consistent with the improvement in the labor market and increased mobility”.

“On the demand side, there is an increase in internal absorption, driven mainly by the greater growth in household consumption since the end of last year,” he says.

The secretariat claims that there is a strong recovery in the job market and cited data from the PNAD (National Survey by Sample of Households) Continuous, which points to the creation of 1.2 million jobs per month. The SPE also points out that the savings rate, which reached 18.6% of GDP in the quarter, returned to the level of 2014.

“The coincident indicators and the statistical loading show that the activity will continue to grow at high rates at the end of the year”, says the SPE.

According to data released today by the IBGE (Brazilian Institute of Geography and Statistics), GDP is at the same level recorded between the end of 2019 and the beginning of 2020, the pre-pandemic period. On the other hand, it is 3.4% below the highest point in the historical series, reached in the first quarter of 2014.

Even with the 1.1% rise in the services sector, which accounts for about 70% of the national GDP, the result of the third quarter was pulled down by the 8% drop in agriculture and the 9.8% decline in exports of goods and services.

Industry, in turn, was stagnant (0%). According to the IBGE, the factories feel the increase in the cost of raw materials in the pandemic and the effects of the energy crisis, which raises production costs.

Projections indicate that the Brazilian GDP should end the year 2021 with growth, largely associated with the depressed base of comparison — in 2020, the pandemic caused a sharp drop in the indicator.