The states that grow the most with the recovery. and which ones skate

Ore yard at the Tubarão marine terminal in Vitória (ES): Espírito Santo’s economy grew by 4% in the March-May quarter, according to consultancy firm 4intelligence. And the extractive industry is expected to gain momentum with Chinese demand. Photo: Agence Vale

The pace of expansion of the Brazilian economy continued at a sustained pace in the second quarter of the year, underlines the consulting firm 4intelligence. Estimates based on IBGE data indicate that the national GDP grew 1.6% in the three-month cycle ended in May compared to the previous three months. Of the federation’s 27 units, 22 also advanced during this period, the vast majority at rates above the national average.

Growth is led by states in the North and Midwest. The five federation units that have made the most progress in this comparison come from these regions. Tocantins and Mato Grosso, up 6%, are the states with the strongest economic growth in the mobile quarter.

In the sequence appears the state of Amazonas, with 5.4% high, according to the calculations of the consulting firm. The increase is linked to the recovery of the local economy after the strong impact caused by the second wave of Covid-19, at the beginning of the year, which put the state in the face of problems, in particular the lack of oxygen for meet the needs of patients.

The crisis led to the adoption of restrictive traffic measures, inhibiting the functioning of industry, commerce and services. With the lifting of restrictive measures, the scenario in the region has changed, underlines the regional affairs analyst of the consultancy firm, Júlia Ghizzi. The industrial GDP grew by 9.1% and that of trade and services, by 3.2%.

Check out the growth rates in all states, with overall GDP and GDP by sector:

The northeast has the worst growth rates

The Northeast is the Brazilian region that has experienced the worst growth rates. In four of the nine northeastern states, GDP for the quarter ended in May was lower than the previous three months. The largest declines occurred in two of the region’s main economies: Ceará (-1.7%) and Bahia (-1.3%).

The poor performance is due to the industry. The analyst points out that there has been a disruption in industrial chains in the region after Ford announced the shutdown of automobile production at the Camaçari (BA) plant. Manufacturing of motor vehicles, trailers and bodies fell 94%. This had an impact on the metallurgical segment in Bahia, which fell by 10.6%.

Another sector that has suffered negative impacts is that of services. In just three northeastern states – Bahia, Alagoas and Pernambuco – there has been growth. “The most affected were services that depend on social interaction,” she says.

However, the trend for the coming months is to recover. The analyst says that the recovery of tourism, one of the bases of the region’s economy, may contribute at a good time in the service segment.

Minas and Espírito Santo stand out in the southeast

In the Southeast, according to 4intelligence, the strong points were Minas Gerais, with growth of 4.1% in the mobile quarter ended in May, and Espírito Santo, with an expansion of 4.0%.

The economy of Minas Gerais benefited from the good performance of industry and commerce. Agriculture, with less participation in the local economy, also experienced significant growth (11.1%).

Espírito Santo has distinguished itself in civil construction and the manufacturing industry. For the next few months, a segment that is expected to gain importance is the extractive industry, due to expanding demand for iron ore, mainly from China.

The state of São Paulo suffers from the problems encountered by the automotive industry. The segment suffers from the lack of electronic chips, which has led automakers to suspend their activities for a few days.

South and Midwest have good growth rates

In the South, the state economy had the highest growth rate (3.3%), driven by countryside and services, which also boosted Paraná. The difference was that the industry in Paraná was the only one in the south of the country to experience growth (0.7%).

The Midwest had more consistent growth rates, ranging from 4.2% in the Federal District to 6% in Mato Grosso. There has been a resumption of household services, which were strongly impacted by the second wave of Covid-19. Another segment that has also experienced strong expansion, according to Júlia, is financial intermediation. “But it should be noted that it does not have a significant share in the economy.”

Agriculture is the highlight of the sector

The country’s sector highlight has been the growth of agricultural GDP. The expansion was 8.4% in the quarter analyzed, driven by the good harvest. “Soy was one of the protagonists,” says the analyst. Data from the National Supply Company (Conab) shows oilseed production increased 8.9% in the last harvest, reaching 135.9 million tonnes.

The largest rural GDP expansions occurred in two agricultural frontiers: Piauí (20.9%) and Maranhão (14.7%). In the first state, the weather conditions caused problems, affecting productivity. In the second, the problems were less and the yield was higher than the previous harvest. The area planted for the 2020/21 harvest has increased due to higher prices and strong external demand.

Minas Gerais (11.1%) and Rio Grande do Sul (8.5%). “In this case, there was a recovery from the previous harvest, affected by climatic issues.”

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