Failed coffee harvests and a lack of industrial inputs hurt second-quarter GDP, according to the Economy Ministry. Photo: Edu Andrade / Ascom / ME
The slight slowdown in the economy in the second quarter is linked to the decline in the coffee harvest and the lack of inputs in the manufacturing industry, especially in the automotive sector. The evaluation is carried out by the Economic Policy Secretariat (SPE) of the Ministry of the Economy.
According to the IBGE, gross domestic product (GDP) fell 0.1% in the second quarter, compared to the first, a performance the institute called “stability”. The result was below expectations – in general, consultants and banks expected slight growth in the quarter.
“The negative result occurred in the quarter with the highest number of deaths from Covid and with relevant sectoral effects. In the manufacturing industry, the shortage of raw materials had negative impacts and, due to the poor coffee harvest, there has been a shrinkage in the agricultural sector, ”said the SPE in a note published on Wednesday (1st).
According to the IBGE, agricultural GDP fell by 2.8% in the second quarter, and that of industry fell by 0.2%. The only sector that has progressed is the services sector, which has the most weight in the Brazilian economy, with an increase of 0.7%. For the SPE, the improvement in services “is due, in large part, to the advance of mass vaccination”.
In the note, the economic team highlighted the 1.8% growth in Brazilian GDP during the cumulative 12-month period, which was above the 1.3% average of the more than 30 countries and groups of countries. the Organization for Economic Co-operation and Development (OECD) which have already published their results. In this regard, specifies the SPE, “Brazil is overtaking developed countries such as the United Kingdom and Germany and, compared to emerging countries, it is only behind China and Chile”.