Analysis: High of 4.6% of GDP is an average of extremes

by

In an occasional synergy between the so-called beginning of the Brazilian year and the GDP result released this Friday (4) by the IBGE, the 4.6% increase consolidates a positive variation to pre-pandemic levels with hopes of a storm that passes, at least around here. The rise was carried by the sectors of services (4.7%) and industry (4.5%). And agriculture fell -0.2%.

The positive variation carries, on the one hand, the optimism of the resumption from the expansion of vaccination coverage, especially in the second semester, but it contrasts with the erratic trajectory of the first months of 2021. The worsening of the epidemiological situation at the beginning of the year, the water crisis, the consequences of the forced slowdown in 2020 and internal instabilities put the 4.6% as a result of an average of extremes, in which the positive results accumulate in the last quarter with the exception of the industry, which showed a decrease of 1.2 % in this period, while GDP, agriculture and services increased by 0.5%, 5.8% and 0.5%, respectively, in the fourth quarter of 2021.

In this sense, the slow recovery of the industry and the still low levels of investment compared to a decade ago are a cause for concern, confirming the worrying analyzes of productivity that are associated with a still relatively high rate of unemployment. Impacting the income of Brazilians, already punished by the high inflation that remains.

The permanence of positive results in 2021, while bringing the idea of ​​less turbulent times, is affected by the possible consequences of the conflict between Russia and Ukraine. If high inflation has already impacted the Brazilian economic result since 2020, the tension between countries affects energy distribution, commodity prices and, at the limit, has the potential to reduce global GDP, which can asymmetrically affect developing countries. A flagship in Brazilian public accounts, it is the external sector that is most rapidly and intensely affected by the global economic reconfiguration.

On the other hand, from a fiscal standpoint, rising oil prices and rising inflation end up positively impacting public accounts, providing a kind of relief to public accounts. Like the “non-carnival carnival” of the last few days, the feeling of relief is between unsustainable and harmful in the long term, as the deleterious effects of inflation on the trajectory of growth and development are recognized.

You May Also Like

Recommended for you