RIO DE JANEIRO—Brazil's economy continued to expand at the start of 2011, fueled by record-low unemployment and higher wages that allowed families to boost spending.
Brazil's gross domestic product expanded 4.2% in the first quarter compared with the first quarter a year earlier, the Brazilian Census Bureau, or IBGE, said Friday. That was below the 4.5% median forecast made by eight economists polled by Dow Jones Newswires and down from year-on-year growth of 5% in the fourth quarter. But Brazil's economic boom actually gained steam in the first quarter, surging 1.3% compared with 0.8% growth in the fourth quarter, the IBGE said.
The latest snapshot of Latin America's largest economy "confirms that the Brazilian economy is in a cycle of sustained expansion, at a pace that is harmonious with internal and external balance," Central Bank President Alexandre Tombini said in a statement. The data also showed that the torrid pace of growth recorded last year carried over into the start of 2011. In 2010, Brazil's economy expanded 7.5%—the fastest growth rate since 1986.
"In comparison with the first quarter last year, growth was very strong. The figures were weaker, but that doesn't mean you can say it's cooling off," said Rafael Bacciotti, an economist at São Paulo-based consultants group Tendencias. "In reality, Brazil's economy accelerated in the [first quarter]."
The heated domestic demand raised inflation concerns as the spillover from 2010 combined with a jump in global commodity prices to cause an increase in prices. The central bank kicked off 2011 by raising bank-reserve requirements and boosting taxes on short-term overseas loans, as well as implementing three interest-rate increases in an effort to rein in credit growth and cool demand. The government also cut 50 billion Brazilian reais ($32 billion) from its budget.
The impact of those measures is expected to be felt more acutely as the year advances. Economists and market analysts polled by the central bank expect Latin America's largest economy to grow 4% in 2011.
"Inflation should be more tranquil in coming months, especially between May and September," Mr. Bacciotti said. "We think that the measures implemented by the government, primarily higher interest rates, will have a greater effect in the second half of 2011." Brazil's economy should decelerate in the last two quarters of the year, ending 2011 with GDP growth of 3.9%, Mr. Bacciotti added.
Domestic demand has played a large part in rising inflation, with Brazilian consumers emboldened by record-low unemployment and climbing salaries. Domestic demand continues to be a "great support" for the economy, Mr. Tombini said.
Industry expanded 3.5% year-on-year in the first quarter, while the service sector led gains with growth of 4.0%. Brazil's massive agriculture industry advanced 3.1%.
Family consumption increased 5.9% year-on-year in the first quarter to 595 billion Brazilian reais ($378 billion), the IBGE said. Government spending rose 2.1% to 179 billion reais.
In market value, Brazil's GDP was 940 billion reais in the first quarter. Brazil's investment rate in the first quarter was 18.4% of GDP, up from 18.2% in the same period of 2010. Fixed-capital formation rose 8.8% year-on-year in the first quarter.
Source: http://online.wsj.com
Brazil's gross domestic product expanded 4.2% in the first quarter compared with the first quarter a year earlier, the Brazilian Census Bureau, or IBGE, said Friday. That was below the 4.5% median forecast made by eight economists polled by Dow Jones Newswires and down from year-on-year growth of 5% in the fourth quarter. But Brazil's economic boom actually gained steam in the first quarter, surging 1.3% compared with 0.8% growth in the fourth quarter, the IBGE said.
The latest snapshot of Latin America's largest economy "confirms that the Brazilian economy is in a cycle of sustained expansion, at a pace that is harmonious with internal and external balance," Central Bank President Alexandre Tombini said in a statement. The data also showed that the torrid pace of growth recorded last year carried over into the start of 2011. In 2010, Brazil's economy expanded 7.5%—the fastest growth rate since 1986.
"In comparison with the first quarter last year, growth was very strong. The figures were weaker, but that doesn't mean you can say it's cooling off," said Rafael Bacciotti, an economist at São Paulo-based consultants group Tendencias. "In reality, Brazil's economy accelerated in the [first quarter]."
The heated domestic demand raised inflation concerns as the spillover from 2010 combined with a jump in global commodity prices to cause an increase in prices. The central bank kicked off 2011 by raising bank-reserve requirements and boosting taxes on short-term overseas loans, as well as implementing three interest-rate increases in an effort to rein in credit growth and cool demand. The government also cut 50 billion Brazilian reais ($32 billion) from its budget.
The impact of those measures is expected to be felt more acutely as the year advances. Economists and market analysts polled by the central bank expect Latin America's largest economy to grow 4% in 2011.
"Inflation should be more tranquil in coming months, especially between May and September," Mr. Bacciotti said. "We think that the measures implemented by the government, primarily higher interest rates, will have a greater effect in the second half of 2011." Brazil's economy should decelerate in the last two quarters of the year, ending 2011 with GDP growth of 3.9%, Mr. Bacciotti added.
Domestic demand has played a large part in rising inflation, with Brazilian consumers emboldened by record-low unemployment and climbing salaries. Domestic demand continues to be a "great support" for the economy, Mr. Tombini said.
Industry expanded 3.5% year-on-year in the first quarter, while the service sector led gains with growth of 4.0%. Brazil's massive agriculture industry advanced 3.1%.
Family consumption increased 5.9% year-on-year in the first quarter to 595 billion Brazilian reais ($378 billion), the IBGE said. Government spending rose 2.1% to 179 billion reais.
In market value, Brazil's GDP was 940 billion reais in the first quarter. Brazil's investment rate in the first quarter was 18.4% of GDP, up from 18.2% in the same period of 2010. Fixed-capital formation rose 8.8% year-on-year in the first quarter.
Source: http://online.wsj.com
No comments:
Post a Comment