Brazilian Institute of Geography and Statistics (IBGE) official GDP report for Q4 2024

Brazil's GDP Grows 0.9% in Q3, Accumulates 4% Growth, Raising Overheating Concerns

Dec 3, 2024, 12:11 PM

Brazil's economy grew more than expected in the third quarter of 2024, with GDP expanding 0.9% compared to the previous quarter, according to data released by the Brazilian Institute of Geography and Statistics (IBGE). The economy has accumulated growth of 4% over the past 12 months, with an annualized growth rate of 3.1%. The expansion was driven primarily by domestic demand, particularly household consumption and investments. Analysts had expected a growth of 0.8%, but the stronger-than-anticipated performance has raised expectations that full-year growth could exceed 3% in 2024. However, the robust growth has also sparked concerns among investors and economists that the economy may be overheating. Silvia Matos, a researcher at the Getulio Vargas Foundation (FGV), commented, "The economy's capacity is at its limit. In fact, we're growing above our capacities. So, it's natural that inflation changes direction; it stops decreasing." The growth rate in the third quarter was lower compared to the second quarter, indicating a slight deceleration. The strong performance may influence the Brazilian Central Bank's monetary policy, potentially affecting the benchmark Selic interest rate and the stock market.