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With investment anf agriculture falling, GDP rises 0.2%

With agriculture and investment falling, the Gross Domestic Product (GDP) of Brazil grew only 0.2% in the first three months of 2012 compared to last quarter of last year, stated IBGE. During the period, GDP totaled R $ 1.033 trillion, in current values​​.

The low growth of the Brazilian economy was already taken for granted by the market, providing a positive variation of 0.3% to 0.5%. Comparing the first quarter of this year to same period of 2011 GDP, the sum of goods and services produced by the country, recorded a rise of 0.8%.

An important part of GDP, agriculture was the segment that pulled the economy’s growth down in the production side. According to IBGE, there was negative growth of 7.3% in the first three months of 2012 compared to last quarter of last year.

Comparing January to March of this year against the same period from last year, the fall in the sector was even higher, at 8.5%.
According to IBGE, some farm products, which are relevant harvest in the first quarter, fell on estimates of annual production and productivity, such as soybeans (-11.4%), rice (-13.8%) and tobacco (-15 , 9%). The investments fell 1.8% between January to March this year compared with October-December 2011 and 2.1% year on year, reflecting the fear of companies in relation to the worsening international crisis. Also contributing to the economic slowdown the increase in imports (which have negative role for GDP because they are composed of goods produced outside the country), which grew 6.3% in the first quarter of 2012 over the same period last year.

In recent months, the price of products imported from abroad was positively affected by the overvalued exchange rate (stronger local currency). According to IBGE, exports grew 6.6% in the first quarter of 2012, largely due to currency devaluation in recent weeks.