Q3 GDP attacked government defending “quality”

The Ministry of the Economy forecast a 0.4% increase in GDP in the third quarter, but the IBGE reported a decline of 0.1%. Photo: Edu Andrade / Ascom / ME

The government chose to emphasize the “quality of growth” by commenting on data released by the IBGE this Thursday morning (9), which revealed the second consecutive quarterly decline in GDP – a situation that economists qualify as a technical recession.

The Economic Policy Secretariat (SPE) of the Ministry of the Economy forecast GDP growth of 0.4% in the third quarter compared to the second, but the IBGE reported a decline of 0.1%.

Compared to the third quarter of 2020, the economy grew by 4%. The expectation of SPE was 4.8% change.

In a note on the result, the SPE highlighted progress in savings and investment rates, said the newly released data is subject to revision, and defended the distinction between what is economic policy and ” unfavorable and punctual climatic factors of nature “, in reference to the greatest water crisis for more than 90 years.

“The savings rate reached 18.6% of GDP in the third quarter, returning to the level of the same quarter in 2014. In turn, the investment rate reached 19.4%, returning to the level at the beginning of the last decade ”, underlines the text of the economic team.

Commenting on what it calls the ‘quality of growth’, the SPE said: ‘If until 2013 the investment was largely financed by public resources, today the investment is mainly financed by the private sector: resources, through private sector decisions, go where they are most effective. and no longer where the state determines.

The press release from Minister Paulo Guedes’ team also highlights the negative performance of the food industry, which is decisive for the quarterly decline. The shrinkage was caused by plant products such as corn, oranges, and sugar cane.

The SPE predicted a stability in this activity compared to the second quarter and an increase of 1% compared to the same period last year, but the IBGE revealed variations of -8% and -9%, respectively. “If the variation in agriculture at the margin was zero, GDP would increase in the range of 0.3% to 0.4% in 3Q21 compared to 2Q21”, specifies the text.

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