Brazil's GDP growth accelerates to 3.4pc in 2024

Market: Agriculture, Biofuels, Crude oil, Electricity, Metals, Natural gas
07/03/25

Brazil's economic growth accelerated to an annual 3.4pc last year, the fastest growth since 2021, as gains in the services and industry sectors offset contractions in the agriculture sector, according to government statistics agency IBGE.

Growth accelerated from 3.2pc in 2023 and 3pc the prior year. Growth was at 4.8pc in 2021 as the economy recovered from the Covid-19 induced contraction of 3.3pc in 2020.

Agriculture contracted by 3.2pc in 2024 after a 15.1pc gain the year prior. The sector's weak performance came as Brazil faced extreme climate events last year that damaged crops, IBGE said.

Corn and soybean output fell by 4.6pc and 12.5pc, respectively, according to IBGE.

The industrial sector grew by 3.3pc last year after a 1.6pc gain in 2023. Manufacturing industries rose by 3.8pc, driven by a higher output of vehicles, transport equipment, machinery and electric equipment, according to IBGE.

Electricity and gas, water and sewage management increased by 3.6pc in 2024 but still decelerated from a 6.5pc gain a year earlier. Higher temperatures throughout 2024 drove the increase, IBGE said. On the other hand, the climate was unfavorable for power generation.

The oil, natural gas and mining industry grew by 0.5pc in 2024 from a year earlier.

Gross fixed capital formation — which measures how much companies increased their capital goods — rose by 7.3pc from a 3pc contraction in 2023, led by higher domestic output and capital goods imports.

Exports rose by 2.9pc, while imports rose by 14.7pc last year. Investment grew by 17pc.

Household consumption increased by 4.8pc from a year prior, driven by a 6.6pc unemployment rate — the lowest registered since IBGE started its historic record in 2012 — federal social aid programs and increased lending.

Government spending rose by 1.9pc in 2024 from a year earlier.

Quarterly GDP

Brazil's GDP growth slowed to an annual 3.6pc in the fourth quarter from 4pc in the third quarter, with several sectors contracting, according to IBGE.

Agriculture contracted by an annual 1.5pc in the fourth quarter, with 2.9pc and 0.9pc contractions in the wheat and sugarcane crops, respectively, IBGE said.

But the industrial sector grew by an annual 2.5pc in the quarter. Manufacturing posted 5.3pc growth, led by the steel sector and higher output of machinery, equipment, vehicles and chemicals. The services sector grew by 3.4pc.

The oil, natural gas and mining industry contracted by 3.6pc from a year earlier thanks to a decrease in oil, gas and iron output, IBGE said.

Electricity and gas, water, and sewage management fell by an annual 3.5pc, on lower power consumption as power rates became more expensive amid a drought that struck the country in mid-2024.

Household consumption grew by an annual 3.7pc, while government spending grew by 1.2pc in the fourth quarter.

Gross fixed capital formation increased by an annual 9.4pc in the fourth quarter, according to IBGE.

Exports fell by 0.7pc, while imports, which subtract from growth, rose by 16pc.

By Maria Frazatto

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