GDP grows 5.7%; investment, 14.4%
Folha de S. Paulo - 12/13/2007
Backed by historical records in the investments of the productive sector and in the consumption of the families, the Brazilian GDP (Gross Domestic Product) grew 5.7% in the third quarter in comparison with the same period of 2006. That was the best growth in this comparison in three years and the 23rd quarter of consecutive rise. The result was above the forecasts of the economists, who are already raising their forecasts for the GDP of the year and even for 2008. In relation to the second quarter, the growth of the GDP was 1.7%. In values, it amounted to R$ 645.2 billion (US$ 362.5 billion) in the quarter. The result practically assures a growth of 5% for the Brazilian economy in 2007. It may be even bigger in case the GDP keeps the current trajectory of the last quarter. A growth of 4.3% in the last quarter will be enough (the "hottest" period of the year) for the GDP to reach 5%. The performance from July to September brought a lot of good news: agriculture leaped 9.2%; family consumption, which represents 60% of the GDP, went 6% up (the greatest increase in ten years); and the industry grew 5% in spite of the weak results of the mining industries (2%). Yet, the best piece of news regarding the GDP has come from the investments. The so-called GFCF (Gross Fixed Capital Formation) had a historic leap: 14.4%. It was the greatest increase since the IBGE (Brazilian Institute of Geography and Statistics) started to calculate the index, in 1996. The data means the companies are investing at a pace almost three times greater than the increase of consumption. That is good because the production of new machinery and equipment in the industries may attenuate, in the future, possible pressures for inflation brought by the warmed demand. For the time being, a great part of the consumption of the families (with 16 quarters of consecutive increase) has been met by the importations. The external purchases had a new leap in the third quarter and went 20.4% up in comparison with the same period of last year. As for the exportations, they grew only 1.8%. The result of the foreign sector led Brazil to record, for the first time since 2001, the need of foreign financing in the past quarter, of R$ 255 million (US$ 143.3 million). The reason was the reduction of the commercial balance of goods and services - from R$ 22.8 billion (US$ 12.8 billion) to R$ 10 billion (US$ 5.62 billion).