Economic activity grows 1.8% in November, says FGV

Economic activity grew 1.8% in Brazil in November 2021, compared to October, indicates the GDP Monitor (Gross Domestic Product), calculated by FGV Ibre (Brazilian Institute of Economics of Fundação Getulio Vargas).

It was the first high after two months of negative variations, according to data released this Wednesday (19).

The monitor also features quarterly cropping. In this case, economic activity was in the red, with a drop of 0.3% up to November, compared to the three immediately previous months.

“In the monthly comparison, there was a reversal, because the rate had been falling. Already the number of the quarter indicates that, even with the growth in November, we had a series of previous problems”, says economist Claudio Considera, associate researcher at FGV Ibre.

The GDP Monitor seeks to anticipate the pace of economic activity in Brazil from month to month. The official GDP result is calculated every three months by the IBGE (Brazilian Institute of Geography and Statistics).

From the perspective of supply, the service sector, the main one in the national economy, grew 1.5% in November, compared to October, according to the FGV monitor. Industry, in turn, rose 0.5%. On the other hand, agriculture fell by 15.9%, after growth of 23.7% in the previous month.

On the demand side, household consumption increased by 0.4% in November. There was a rise of 19.2% in productive investments in the economy, measured by Gross Fixed Capital Formation, which had fallen by 15.6% in October.

Government consumption (0.7%) and exports (3.4%) were also in the blue. Already imports retreated 0.1% in the month.

According to the monitor, economic activity grew by 4.4% in the 12-month period through November.

As it considers, the expectation is that the GDP will end the year 2021 with an increase in the range of 4.5%, greatly influenced by the weak basis of comparison – in 2020, the fall was 3.9%.

“It is possible that GDP will also have some growth in the fourth quarter of 2021, but not something to be widely celebrated”, ponders the researcher.

In November 2021, the monitor also pointed to a 2.2% growth in activity compared to the same month of the previous year. Compared to the quarter ended in November 2020, there was an increase of 1.3%.

After the restrictions generated by the pandemic, the attempt at economic recovery in Brazil began to be stimulated by the reopening of sectors such as services.

The business reaction, however, has been held back by a combination of factors, including escalating inflation, higher interest rates, falling labor incomes, political crises and fiscal uncertainty.

The most recent GDP data calculated by the IBGE refers to the third quarter of 2021. At the time, the indicator shrank 0.1%. It was the second consecutive drop.

“The economy is practically stagnant”, says Considera.

Amidst the difficult scenario, the financial market predicts low economic performance in 2022.

The projection is for an increase of only 0.29% in GDP this year, according to the most recent edition of the weekly newsletter Focus, released on Monday (17) by the BC (Central Bank). There are even analysis houses that are betting on a decline in GDP in 2022.

Before the release of the FGV monitor, the BC presented the November result of the IBC-Br, another activity indicator. The IBC-Br advanced 0.69% in the penultimate month of 2021, compared to October.