Household consumption loses steam and rises 1% in the 3rd quarter

Household consumption, the engine of the Brazilian GDP (Gross Domestic Product), grew 1% in the third quarter of 2022, compared to the immediately previous three months, pointed out this Thursday (1st) the IBGE (Brazilian Institute of Geography and Statistics).

It was the fifth positive rate in a row. The new result, however, signals a loss of momentum for the indicator. Is that, in the second quarter, consumption had grown by 2.1%.

This is the main component of GDP from the perspective of demand – that is, spending on goods and services. Household consumption accounts for around 60% of the indicator. GDP, in general terms, rose by 0.4% in the third quarter.

On the eve of the October elections, the Jair Bolsonaro (PL) government sought to stimulate consumption through measures such as expanding the Auxílio Brasil to R$600 and tax cuts on fuel.

Consumption directed to services has also benefited from the reopening of activities after the pandemic restrictions. Bars, restaurants, hotels, gyms, beauty salons, shops and educational institutions are part of this segment.

High inflation, on the other hand, forced the BC (Central Bank) to raise interest rates. Monetary tightening is considered to be the main factor responsible for projections of a slowdown in GDP from the second half of 2022 onwards. High default rates are another factor hindering the recovery of consumption.

Investments rise 2.8%

The IBGE also informed this Thursday that productive investments in the Brazilian economy, measured by the GFCF (Gross Fixed Capital Formation) indicator, rose 2.8% in the third quarter, in relation to the immediately previous three months.

GDP from the perspective of demand also includes exports, imports and government consumption.

Exports rose 3.6% in the third quarter. Meanwhile, imports increased by 5.8%. Government consumption, in turn, increased by 1.3%.