Industrial production drops 0.7% in 2022 and remains below pre-pandemic levels

Brazilian industrial production closed the year 2022 with an accumulated drop of 0.7%, reported this Friday (3) the IBGE (Brazilian Institute of Geography and Statistics). The sector is 2.2% below the pre-pandemic level.

In the monthly comparison, the indicator was stagnant (0%) in December, compared to November. Analysts consulted by the Bloomberg agency projected null variation (0%).

According to economists, the industry failed to show a more consistent performance last year due to a combination of factors that made consumption difficult.

On the one hand, inflation remained high on products such as food. On the other hand, high interest rates created an obstacle to the purchase of more expensive industrial items that depend on the granting of credit.

There has also been a migration from consumption of industrial goods to services that were paralyzed in the initial phase of the pandemic, analysts say.

In other words, this change would have reduced the share of household budgets allocated to buying products that leave factories.

The year 2023 tends to bring new challenges for the industrial sector. Economists’ projections point to a slowdown in economic activity in Brazil and threats coming from the external scenario.

The BNDES (National Bank for Economic and Social Development) under the government of Luiz Inácio Lula da Silva (PT), on the other hand, promises that it will focus on industry. The new management of the development bank has already spoken of the need for reindustrialization of the country.