After suffering a historic fall with the arrival of the pandemic in 2020, the Brazilian GDP (Gross Domestic Product) rose by 4.6% in 2021, resuming the pre-coronavirus level, according to data released this Friday (4) by the IBGE. (Brazilian Institute of Geography and Statistics).
The reaction, however, is still uneven: not all components of the indicator have completed this recovery.
From the perspective of supply, in the almost two years of the pandemic, the information and communication services subsectors stood out, almost 18% above the fourth quarter of 2019, before Covid-19, in addition to the construction industry (8.4% ) and transport services (5.6%).
Overall, GDP was 0.5% higher than at the end of 2019. At the time, the indicator was still trying to get rid of the losses generated by the 2015 and 2016 recession.
At the other end of the segments, that of those who were below the pre-pandemic level, is the manufacturing industry, with a contraction of 3%.
About 1.5% below the pre-crisis level are public administration, extractive industries and electricity, water and sewage, and other service activities, which include those that depend on agglomerations and social contact (restaurants and tourism, for example).
By the demand components, household consumption, the engine of the economy, has not yet returned to the level of 2019.
“There is a heterogeneous recovery between sectors. This is related to the pandemic, which caused changes in habits”, says economist Bruno Imaizumi, from LCA Consultores.
Among the major sectors surveyed on the supply side, the 4.6% rise in GDP was accompanied by 4.7% advances in services and 4.5% in industry, after losses of 4.3% and 3, 4% in 2020, respectively.
Agriculture, which had grown by 3.8% in the previous year, dropped by 0.2%, under the influence of adverse weather.
On the demand side, there was a 17.2% growth in productive investments in the economy, measured by GFCF (Gross Fixed Capital Formation), after a drop of 0.5% in the previous year. Household consumption increased 3.6% in 2021, after falling 5.4% in 2020.
Breathless in 2022
In 2022, analysts’ forecasts indicate a loss of breath for GDP, in a context of high interest rates, persistent inflation and possible impacts of the war between Russia and Ukraine.
According to economists, the trend is for the indicator to stagnate this year. In other words, the forecast is for GDP close to 0% in the accumulated until December.
The median of market projections signals an advance of 0.30% in 2022, according to the most recent edition of the Focus bulletin, released on Wednesday (2) by the BC (Central Bank).
“The scenario for 2022 is one of stagnation, with inflation still high and income low. Monetary policy should also weigh, slowing down activity”, says economist Luca Mercadante, from Rio Bravo Investimentos.
“It is still complicated to talk about the effects of the war, but one of the possible consequences is the decrease in global growth”, he adds.
Economist Lucas Maynard, from Banco Santander, assesses that face-to-face services still have room to grow in Brazil throughout the first half of 2022, in the wake of the reopening of activities.
“The effects of reopening did not end in 2021”, he says.
However, from the second half of this year onwards, the picture tends to get more complicated for GDP, due to the stronger impact of high interest rates, says Maynard.
“The contractionary monetary policy should have an impact, especially in the second half.”
To a large extent, the 4.6% rise in GDP in 2021 was associated with the weakened basis of comparison with the initial year of the pandemic and the effects of the reopening of the economy.
The result was close to the expectations of the financial market. Analysts consulted by the Bloomberg agency had forecast a rise of 4.5%.
“Much of the growth in 2021 is due to the statistical load. In addition, there was an impact from the reopening of the economy. These were the two main factors”, says the chief economist at C6 Bank, Felipe Salles.
“We also had the positive effect of the strong growth of the global economy”, he adds.
XP says that high-frequency data for GDP for the first quarter of 2022 point to an increase of 0.4%, but the assessment is that the Brazilian economy should lose strength in the coming quarters, reflecting factors such as tightening of monetary policy, levels of depressed incomes and heightened uncertainties in the global economic environment. Therefore, the projection for the year’s result is still of stability.
Marcelo Fonseca, chief economist at Opportunity Total, says he maintains the projection of a small contraction in 2022, around 0.5%, with the monetary tightening negatively affecting household consumption and investments.
Bank of America expects growth of 0.5% this year, but sees chances of a bigger result. Goldman Sachs projects expansion of 0.8%.
High after the initial phase of the pandemic
The 4.6% growth in 2021 is the highest since 2010 (7.5%). The data came after a 3.9% drop in 2020, the most intense in the IBGE’s historical series, with data since 1996.
“The distribution of this growth was uneven across sectors and its main axes consisted of service sectors, notably information and communication and transport, and the construction industry”, commented the Iedi (Instituto de Estudos para o Desenvolvimento Industrial).
The IBGE also informed that, in the fourth quarter of last year, the GDP increased by 0.5% compared to the immediately previous three months.
In this cut, the result surprised analysts, since the median of the market signaled an increase of 0.1%.
In the fourth quarter, among the major sectors, the highlight came from services, with an increase of 0.5%, according to the IBGE. Agriculture, with less weight in GDP, rose 5.8%. The industry shrank 1.2%.
According to economist Bruno Imaizumi, from LCA Consultores, service data came better than expected in the fourth quarter. The LCA projected GDP of 0.1% in the period.
Even with the positive result, GDP was still 2.8% below the peak of the historical series, recorded in the first quarter of 2014.
GDP per capita reached R$ 40,688 last year, an increase of 3.9%. The indicator, however, remains below the pre-pandemic, according to the IBGE.
GDP per capita considers the value of production or income divided by the population.
“The cake grew, but the population grew as well. It should have been a little bigger for the distribution to be the same [ao que era em 2019]”, said the coordinator of National Accounts at IBGE, Rebeca Palis.
“Population growth meant that GDP per capita did not recover from the effects of the pandemic, as GDP as a whole did.”
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