Engine of GDP (Gross Domestic Product) in Brazil, household consumption grew 3.6% in 2021, indicated this Friday (4) the IBGE (Brazilian Institute of Geography and Statistics).
The rise came after a 5.4% drop in 2020, when the arrival of the Covid-19 pandemic brought down the national economy. The indicator is still 1.3% below the pre-crisis level (end of 2019).
The country’s GDP increased by 0.5% in the fourth quarter of 2021 and ended the year with a growth of 4.6%.
Household consumption is the main component of GDP from the perspective of demand, accounting for around 60% of the indicator’s calculation in the country.
“There was a recovery in occupation in 2021, but high inflation greatly affected the ability of families to consume. Interest rates began to rise. We also had government assistance programs. That is, positive and negative factors impacted the result of family consumption last year”, says the coordinator of National Accounts at IBGE, Rebeca Palis.
In addition to the fragile basis of comparison, the reopening of the economy is also pointed out by analysts as an influencing factor for growth in 2021.
The recovery in consumption, however, is threatened by higher interest rates earlier this year, persistent inflation and lean income. Together, the three factors reduce the purchasing power of the population.
According to GDP data released this Friday, productive investments in the Brazilian economy, measured by the GFCF (Gross Fixed Capital Formation) indicator, also rose in 2021. The increase was 17.2%, after a 0.5% drop in the previous year. It was the highest growth since 2010 (17.9%).
The coordinator of National Accounts at IBGE, Rebeca Palis, stated that the contribution of investments to GDP was even higher than that of household consumption. All investment components rose. Construction, 12.8%. Machinery and equipment (domestic and imported), 23.6%, with emphasis on agricultural machinery and trucks.
“The recovery of the economy boosted this growth. A lot of dammed things started working again. The recovering construction sector also helped to increase the production of machinery and equipment”, said Palis.
She said that, compared to 2020, there were no distortions in the number due to prices and oil platforms, as happened last year.
​The investment-to-GDP ratio stood at 19.2%, still below the peak of 20.9% in 2013.
GDP from the perspective of demand also includes exports, imports and government consumption.
Government consumption fell 4.5% in 2020 and grew 2% in 2021. Exports advanced 5.8% in 2021. Imports grew 12.4%.
“As the economy heated up, the country imported more than it exported, which generated this deficit in the balance of goods and services. This pulled the GDP down a little, contributing negatively to the performance of the economy”, explains Rebeca Palis.
The IBGE also presented quarterly GDP data this Friday. In the fourth quarter of 2021, household consumption increased by 0.7% compared to the immediately previous three months. Productive investments in the economy grew by 0.4% in the same period.
Meanwhile, exports dropped 2.4% between October and December. Imports rose 0.5% in the same range. Government consumption advanced 0.8%.
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