Brazil Gross Domestic Product (GDP) y/y

In Brazil, GDP calculation is performed by the Brazilian Institute of Geography and Statistics (IBGE) through the System of Quarterly National Accounts (SCNT) and the quarterly and annual results are made available by the IBGE Automatic Recovery System (SIDRA).

GDP (Gross Domestic Product) is the total value of all goods and services (agriculture, industry, and commerce) that are produced in Brazil in a time interval. The purpose of GDP is to measure economic activity and the level of wealth. The higher the production, the greater the increase in consumption, investment and commerce in general.

The index only considers the final value of the goods and services, so as not to repeat the same calculation twice or more, for example: when the meat reaches the market for direct sale to the consumer, only the final price of the meat will be used for the calculation. The values attributed to livestock rearing, slaughtering, transportation and others do not enter this stage of GDP calculation. In each phase that goes from the production to the marketing of the good, the calculations are based specifically on each step, so that in the end there are no overlapping values.

Population consumption directly influences the GDP variation. The more the population consumes their goods and services, the more GDP grows, otherwise GDP falls. Consumption is intrinsically linked to wages and interest. When the population earns more and pays less interest on their debts, consumption will be higher and GDP will grow. With low wages and high interest rates, personal consumption falls and GDP falls as well, high interest rates hinder the growth of the country.

The companies that are expanding buy more machines, increasing the volume of their activities. Shortly after, they hire more employees, which moves the economy forward and increases GDP. High interest rates also hinder the companies, as they will not invest so much if they have to pay more for loans.

The government also has its share in boosting GDP. For example, when the government invests in structural works (such as building a road) workers are hired, the rate of unemployment is reduced, consumption of construction material is increased, and the overall output of the economy is increased.

Exports are also a major factor of the GDP growth, a greater volume of money entering the country is directly linked to the increase in spending on domestic investment and consumption.

Gross Domestic Product y/y reflects the monetary value of all goods and services produced in Brazil during a given quarter compared to the same quarter of the previous year. The GDP growth may positively affect the Brazilian real (BRL) quotes.