By Lise Alves, Senior Contributing Reporter
RIO DE JANEIRO, BRAZIL – The GDP growth for Brazil in 2018 was disappointing, increasing by only by 1.1 percent compared to 2017, according to Brazil’s Institute of Geography and Statistics (IBGE). For stronger results, structural reforms must be conducted, say government officials.
“In order for GDP per capita to grow again in a sustainable manner, it is necessary for structural reforms to occur. The new Social Security (reform) is a necessary condition for the long-term fiscal balance of the economy, improving the investment environment and avoiding a new lost decade,” stated a document released on Thursday by the Economic Policy Department (SPE) at Brazil’s Economy Ministry.
The growth, or lack thereof, was affected by the truck drivers’ strike and by electoral uncertainties and the aggravation of international tensions over the past year, notes the document. Brazil’s GDP grew at the same pace, 1.1 percent, as the growth registered in 2017.
The highlight of the 2018 GDP was the service sector, with the highest growth registered among the sectors (1.3 percent). Services was followed by industry, with a 0.6 percent growth and agriculture, growth of 0.1 percent.
In the services sector, real estate activities and retail were the segments with the greatest increase (3.1 percent and 2.3 percent).
“These activities were benefited by a more stabilized market, coupled with more controlled inflation and slightly lower unemployment than last year,” said Cláudia Dionísio, IBGE National Accounts manager.
Household consumption expenditures increased by 1.9 percent from 2017 while government consumption spending remained stable.