Finance Minister says Brazil achieves economic expansion without generating inflation

BRASILIA, Brazil, Sept. 3 /PRNewswire/ -- The Brazilian government announced today that its 2010 second quarter real Gross Domestic Product rose 1.2 percent over the first quarter of 2010, according to data released by the Brazilian Institute of Geography and Statistics (IBGE). National production of goods and services amounted to R$ 900.7 billion, or US$ 520 billion. These results demonstrate that the economy is growing at a strong and steady pace.

"The slight deceleration of growth in Brazil's economy this quarter is healthy," said Minister of Finance Guido Mantega, "Cyclical forces and controlled measures to withdraw monetary stimulus slowed the rates we'd seen at the start of the year, but overall Brazil's economy is growing at a sustainable pace.  Investment is increasing at a rate three times faster than GDP, which guarantees economic expansion without generating inflation."  

Brazil's 1.2 percent quarterly growth over the second quarter of 2010 is due to steady growth in the agriculture (2.1 percent), industry (1.9 percent) and services (1.2 percent) sectors. The investment rate during this period was 17.9 percent of GDP and the Gross Savings Rate reached 18.1 percent.

2Q 2010 Q-o-Q Performance

Brazil's economy recorded 8.8 percent growth in a comparison of the second quarter of 2010 to the second quarter of 2009. This increase can be attributed to growth in the industrial (13.8 percent), agriculture (11.4 percent) and services (5.6 percent) sectors.

Domestically, Brazil saw a 6.7 percent quarter-on-quarter increase in household consumption and a 5.1 percent increase in public administration consumption over the same period. The growth rate of gross fixed capital formation in the quarter was 26.5 percent, the highest since the beginning of the series in 1996.

Annual Performance

In a year-on-year comparison, Brazil's real GDP increased by 5.1 percent in the seasonally adjusted series. The GDP report revealed strength in the industry sector with growth of 5.6 percent, followed by the services sector (4.5 percent growth), and an increase in the agriculture sector of 1.6 percent.

During this period, gross fixed capital formation grew 8.9 percent annually, household consumption increased by 6.9 percent, and consumption of public administration grew by 3.4 percent over the twelve-month period comparison.

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The Brazilian Institute of Geography and Statistics (IBGE)

To access more information about IBGE in English and the full 2Q 2010 GDP press release in Portuguese, please visit:  www.ibge.gov.br/english/

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