![Brazil's economy expected to log marginal growth in fourth-quarter: Reuters poll](https://i-invdn-com.investing.com/news/indicatornews_3_800x533_L_1412601605.jpg)
By Gabriel Burin
(Reuters) – Brazil’s economic system is predicted to have logged marginal progress final quarter in opposition to the earlier three-month interval, but it surely additionally most likely superior at an honest tempo on a yearly foundation that boosted total 2023 exercise, a Reuters ballot discovered.
A sooner enlargement within the nation’s industrial sector – led by extractive segments like mining and oil manufacturing – doubtless offset an additional deceleration of agricultural output, whereas companies stored rising reasonably.
Gross home product (GDP) in Latin America’s No.1 economic system is forecast to have elevated simply 0.1% quarterly and a couple of.2% yearly, in accordance with median estimates of 19 analysts surveyed Feb. 21-26.
Quarterly projections for official knowledge due on Friday ranged between -0.1% and 0.3%. In the July-September interval, Brazilian GDP expanded at a quarterly clip of 0.1%.
“We estimate the service sector maintained an annual growth rate of 1.8%, while industry should have registered an annual increase of 1.7% compared to 1.0% in the third-quarter,” Itau Unibanco analysts wrote in a report.
“The agricultural sector will have kept slowing down, with a 5.6% increase in the fourth quarter compared to 8.8% in the third quarter”. Farm output had risen greater than 20% on the yr within the first-half of 2023.
The economic system carried out higher than anticipated for essentially the most a part of final yr, bolstering the fortunes of President Luiz Inacio Lula da Silva’s authorities within the face of a close-fisted financial easing strategy by the central financial institution.
Industrial manufacturing rose for a fifth consecutive month in December, extending a constructive streak in place since August that elevated exercise on the manufacturing hub of Sao Paulo, among the many largest on the planet, again to pre-pandemic ranges.
From the demand aspect, final yr’s enlargement mirrored a nonetheless resilient home job market that mixed with the constructive affect on consumption of recent welfare applications, in addition to booming exports of commodities like soybeans and iron ore.
Private funding has been contracting, nonetheless, as firms postpone massive capital spending plans to allocate funds in accounts paying excessive rates of interest, amid rising uncertainty over Lula’s means to plug huge fiscal deficits.
Calendar-year progress most likely ended 2023 at a wholesome price between 2.8%-3.0%, and is ready to lower to 1.6% this yr, mentioned Alex Agostini, chief economist at Austin Rating, consistent with a separate Reuters ballot printed final month.
“The government still faces the main challenge of upgrading economic expectations by balancing Brazil’s public accounts, given inflation must remain within target and interest rates under double-digits,” Agostini mentioned.
(Reporting and polling by Gabriel Burin; Editing by Chizu Nomiyama)