Brazil beats forecasts with 2.3% growth in 2013

Brazil's economy grew at a better-than-expected 2.3 percent in 2013, figures from the country's office for national statistics, the IBGE, revealed on Thursday.

Brazil beats forecasts with 2.3% growth in 2013

World Bulletin / News Desk

Brazil’s economy grew 0.7 percent in the fourth quarter (Q4) of 2013, and saw a 2.3 percent increase in gross domestic product (GDP) for the whole year, the country's office for national statistics, the IBGE, revealed on Thursday.

The figures were better than expected, according to analysts, who predicted negative growth in the fourth quarter, which if realized, would have signaled a recession for Brazil. The economy contracted 0.5 percent in the third quarter of 2013.

In fact, Q4 was up 1.9 percent year-on-year, and the 2.3-percent growth in GDP was a great improvement compared to the 1.0 percent registered in 2012. It is still a far cry from the 7.5 percent growth seen in 2010 however.

Predictions as to how the economy will perform this year still vary widely, with some market forecasts having slashed their outlook to 1.7 percent.

The Brazilian government's official outlook currently gives a 2.5-percent growth for this year, although it had been 3.8 percent until last week.

The government of President Dilma Rousseff celebrated the results, with Finance Minister Guido Mantega saying they showed that “the Brazilian economy is on a trajectory of gradual acceleration [that] will continue in 2014.”

However, Mantega said that although a recovery in the international economy was happening, it was still slow. He also warned against overstating the “volatility and turbulence” seen at the start of the year, saying that it would “calm down” as the year progressed.

Analysts interviewed by Anadolu Agency say Brazil is also likely to see growth of around two percent in the mid term.

Thursday's news will also be welcome in terms of investor confidence, which has largely evaporated in the last three years.

Services pushing growth

The IBGE said a two-percent increase in the services sector in 2013 had been responsible for driving growth – with IT services up 5.3 percent. The sector carries considerable weight as it represents 70 percent of Brazil's production sector.

Despite this, it was agriculture and livestock that saw the biggest growth - seven percent - despite concerns over water shortages.

Soybean production was up an impressive 24.3 percent in 2013, further fanning speculation that Brazil will dethrone the United States in 2014 as the world's biggest producer of the commodity.

Industry generally was only 1.3 percent, although extraction mining saw a 2.8 percent drop last year – the only activity to register a fall.

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