The Brazilian economy as a whole (PIB) increased by 2.8% over the year to the end of Q2 2013. In the second quarter of this year alone, the growth was 1.5% which surprised economists who were expecting more like 1%. This combined figure masks the disparity between the different sectors of “the economy of Brazil”; the components are: agriculture 3.9%; industry 2.0% and services 0.8%.
The weakening of the Real, combined with an undiminished world appetite for food, has proven a real boon for the agricultural sector. When the data comes out for the different regions of Brazil it is likely that the economy of the state of Goiás, and others where agriculture is a principal economic driver, will show stronger than average growth.
While the economy as a whole has grown, household consumption is reported to be weak and this has led to increased stock levels.
The expectation for Q3 2013 is for much weaker growth, of c. 0.5%, and the expectation for 2013 as a whole is for around 2.5% growth but that is looking conservative.