Itaú BBA - GDP expands 0.4% in 2Q19

Macro Brazil

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GDP expands 0.4% in 2Q19

agosto 29, 2019

Construction sector performance was a positive highlight, increasing 1.9%.


For the version with all charts and tables, please open the attached pdf file
 

• GDP advanced 0.4% qoq/sa in 2Q19, topping market expectations (+0.2%) and slightly below our forecast (+0.5%). Year-over-year, GDP climbed 1.0%.

• The main positive highlight, in our view, was the performance of the construction industry, which expanded 1.9% qoq/sa in 2Q19, following a steady declining trend since 2014.

• The quarterly GDP series is volatile, and we do not view the positive reading in 2Q19 as a pickup in the economy. Moreover, the few indicators already out for 3Q19 suggest another slowdown in quarterly growth.

• Falling interest rates and expanding private credit have a positive contribution to economic activity. On the other hand, deceleration in the global economy limits a sharper pickup. Our GDP growth forecasts are 0.8% in 2019 and 1.7% in 2020.
 

Luka Barbosa
Alexandre Gomes da Cunha

Matheus Felipe Fuck

 

For the version with all charts and tables, please open the attached pdf file



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