(Reuters) Brazil’s economy expanded by 1.2% in the first quarter, data showed on Tuesday, the third quarter of growth and faster than economists had expected, taking Latin America’s largest economy back to its size at the end of 2019 before the pandemic.
Growth was driven by services, industry and fixed business investment, official statistics agency IBGE figures showed, although household consumption contracted slightly and government spending fell notably. Agriculture grew by 5.7% in the quarter, IBGE said, its fastest pace in four years.
The 1.2% rate of expansion from the previous three months was more than the median forecast in a Reuters poll of economists for 1.0% growth.
The range of forecasts from 27 economists was extremely wide, indicating the difficulty they had in assessing the impact of the end of emergency government aid payments to the poor on December 31 and the onset of the COVID-19 pandemic second wave.
Industry expanded by 0.7%, the dominant services sector grew 0.4%, and fixed business investment rose 4.6% in the quarter, IBGE said.
On the downside, household consumption slipped 0.1% and government spending fell 0.8%, one of the biggest quarterly declines in years.
Gross domestic product grew by 1.0% year on year, IBGE figures showed, again more than the 0.8% rise forecast in a Reuters poll.
IBGE figures show economic activity is back to its pre-pandemic level at the end of 2019 but still 3.1% below its peak in 2014.
A clutch of upbeat indicators recently, including record tax collection and formal job growth, has triggered a wave of upward revisions to economists’ full-year GDP growth forecasts, mostly above 4% and some as high as 5%.