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LATIN AMERICA | 01-03-2024 16:08

Brazil economy grew 2.9% in 2023, says official data

Brazil's economy expanded 2.9% in 2023 after a fourth quarter of zero growth, according to data released Friday by the IBGE national statistics agency.

The Brazilian economy expanded 2.9 percent in 2023 after a fourth quarter of zero growth, according to data released Friday by the IBGE national statistics agency.

The gross domestic product growth of Latin America's largest economy was slightly lower than the 3.0 percent for 2022, according to revised figures.

Growth over the past year was driven mainly by the agricultural sector, which surged by 15.1 percent, the industrial sector (1.6 percent), and services (2.4 percent).

Financial institutions and consulting firms had projected growth of about 0.1 percent in the final three months of 2023, and 3.0 percent for the full year, according to business daily Valor Econômico.

For 2024 the market anticipates gross domestic product growth of 1.75 percent, according to the last survey by the central bank.

Many analysts attribute the modest growth to interest rate levels.

High rates limit expansion by making credit more expensive, discouraging consumption and investment and generally slowing business activity.

Since his return to power in January 2023, President Luiz Inácio Lula da Silva has pushed for lower rates to boost economic growth.

Central Bank president Roberto Campos Neto told a G20 meeting of finance ministers in São Paulo this week that "reducing inflation has a cost, but the delay in achieving price stability may increase the sacrifice needed to lower prices and further hurt the most vulnerable."

Brazil's monetary authority has steadily cut the federal interest rate since last August at a steady 0.5 points per month.

The so-called Selic rate stood at 11.75 percent in December and was cut to 11.25 percent in January.

 

– TIMES/AFP

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