The 2019 GDP rise is revised from 1.4% to 1.2% with the impact of Brumadinho

The growth of the Brazilian GDP (Gross Domestic Product) in 2019 was revised from 1.4% to 1.2%, reported this Friday (5) the IBGE (Brazilian Institute of Geography and Statistics).

According to the institute, the lower rise resulted mainly from the incorporation of new data on the economic impact of the environmental disaster in Brumadinho (MG), on January 25 of that year. At the time, there was a collapse of a dam owned by the mining company Vale in the municipality of Minas Gerais.

As a result, the fall in the mineral extraction industry in 2019 underwent a strong adjustment, from -0.9% to -9.1%. The impact of this revision on the industry’s gross added value was -1 percentage point.

The 1.2% increase in 2019 is the third in a row for GDP. There were also advances in 2017 (1.3%) and 2018 (1.8%).

The highs, however, were insufficient to reverse the accumulated decline in the 2015 and 2016 recession (-6.7%), pondered the IBGE.

In current values, the GDP of 2019 was BRL 7.389 trillion, which corresponds to an increase of 1.2% compared to 2018.

The GDP per capita, which divides the value of production by the population, reached R$ 35,161.70 in 2019, an increase of 0.4% compared to the previous year.

The results are part of the National Accounts System with an annual cut. According to the IBGE, the survey aggregates new data from the institute and from external sources, which are broader and more detailed, in comparison with the Quarterly National Accounts, which portray the performance of the GDP every three months.

The consolidation of results usually takes place two years after the reference period — in the case of 2019, the review was carried out in 2021.

According to the institute, the service sector, the main one from the perspective of supply, grew 1.5% in 2019. it was also in the blue, with an advance of 0.4%.

The industry, in turn, suffered a low of 0.7%, impacted by the Brumadinho disaster.

Due to the demand bias, household consumption grew 2.6% in 2019. Government final consumption expenditure, on the other hand, declined by 0.5%.

Investments in the Brazilian economy, measured by the GFCF (Gross Fixed Capital Formation) indicator, increased 4%. It was the second positive result after four straight years in the red.

After growing 1.2% in 2019, the Brazilian economy plunged into a new phase of difficulties, with the arrival of the Covid-19 pandemic in 2020.

Figures already released by the IBGE indicate that GDP shrank 4.1% last year. It was the biggest fall in the current historical series, with data since 1996.

To complicate matters, economic performance continues to show signs of weakness in 2021, amid the effects of the pandemic, political crisis and fiscal uncertainties.