IPEA Indicator Shows one Percent Growth in Investments in July

RIO DE JANEIRO, BRAZIL – On Thursday, September 5th, the monthly indicator of Gross Fixed Capital Formation (GFCF) reported by the Institute of Applied Economic Research (IPEA) registered a high of one percent in July compared to June of this year and is due to seasonal adjustment.

In the moving quarter ended in July, the indicator had a high of 3.1 percent in comparison with the previous quarter. In comparison with July of last year, the indicator grew by 0.4 percent. In the accumulated 12 months, investments decelerated – going from 4.3 percent to 3.1 percent.

The GFCF is comprised of three segments: machinery and equipment, civil construction, and other fixed assets and determines investments to increase the productive capacity of the economy and to replace the depreciation of its fixed capital stock.

According to IPEA, in July, investment in machinery and equipment grew by 1.2 percent. The civil construction segment had a positive variation of 1.1 percent in July. The component named “other fixed assets” expanded by one percent.

“In comparison with July 2018, the performance was heterogeneous: while machinery and equipment fell 2.9 percent (and the national component of machinery and equipment grew 14.9 percent and imports fell 24.7 percent – in this case, because of the import of oil platforms in July last year), civil construction grew 2.4 percent and the other fixed assets advanced 3.8 percent,” reported IPEA.

In the accumulated in 12 months, the civil construction had a negative variation of a drop of 1.2 percent. The national component of machinery and equipment had a 3.5 percent increase, while imports grew by 13.6 percent. The other assets advanced by 5.2 percent.