Brazilian Economy Rebounds in Q1 2024, Uncertainties Remain Ahead

• Brazil's economy rebounded in the first quarter from a sluggish second half of 2023 on stronger private investments and household demand amid a robust labour market, official figures showed on Tuesday, June 4.
• While the data supports a more optimistic outlook for Latin America's largest economy than earlier this year, concerns remain about the impact of historic flooding in southern Brazil, which has left a trail of destruction and pushed up food prices.
• Brazil's gross domestic product (GDP) expanded by 0.8% in the three months through March, gaining momentum from a revised 0.1% contraction in the prior quarter, according to the government statistics agency Brazilian Institute of Geography and Statistics (IBGE).
• Economic growth from the prior quarter was in line with the 0.8% median forecast in a Reuters poll of economists, while the 2.5% year-on-year rise exceeded the expected 2.2% growth.
• The stronger momentum has been fueled by a strong labour market, which spurred household consumption 1.5% higher from the previous quarter, while government spending remained flat.
• The Finance Ministry's economic policy secretariat (SPE) acknowledged that growth is expected to slow in the second quarter, reflecting the calamity in Rio Grande do Sul (severe climate events that claimed lives and will likely reduce economic activity). "Even with the positive result similar to that projected by SPE in the first quarter, uncertainties remain regarding the growth estimate for 2024," it said.

(Source: Reuters)