BRASILIA (Reuters) – Brazil’s economy decelerated in the third quarter, with a lower than expected growth, but still enough to place it at the highest level of the series since starting in 1996.
The country’s gross domestic product rose 0.4% in the three months to September, government statistics agency IBGE said on Thursday, below the 0.7% growth expected by economists polled by Reuters.
This was the fifth consecutive quarter of expansion, again bolstered by the services sector, putting the largest economy in Latin America 4.5% above the level posted before the pandemic, in the fourth quarter of 2019.
Still, the loss of steam underscores the challenges ahead as the central bank’s aggressive monetary tightening to battle inflation begins to weigh more heavily on activity, overshadowing government stimulus ahead of Oct. presidential elections this year that helped boost demand.
The performance in the third quarter was fundamentally driven by a 1.1% growth in the dominant services sector, while industry grew by 0.8% and agriculture fell 0.9%.
On the demand side, investment increased by 2.8%, government expenditure grew by 1.3%, and consumer spending rose by 1.0%.
Brazil’s GDP expanded by 3.6% from the third quarter of 2021, while economists projected a 3.7% increase.
IBGE also revised the second-quarter result to a 1.0% expansion over the previous quarter from the 1.2% reported previously. But the first quarter growth has now climbed to 1.3% from 1.1% previously.
(Reporting by Marcela Ayres; Editing by Steven Grattan)
