Brazil’s GDP growth slowed dramatically in 2011, falling from 7.5 percent growth in 2010 to 2.7 percent last year. In the fourth quarter, it grew by just 1.4 percent on an annualized basis. This is actually an improvement over the third quarter, when GDP fell at an annual rate of 0.3 percent.
GDP growth in the fourth quarter was divided fairly evenly among industries, with one exception: manufacturing, which shrank at a 9.5 percent annualized rate. Over all of 2011, it has remained flat, growing just 0.1 percent over its 2010 level. But since June it has seen two quarters of consecutive negative growth and fallen to 5.7 percent below its pre-recession peak of 2008.
The sector with the best performance since the recession has been finance and insurance, which grew 3.9 percent in 2011 and is now 23.1 percent above its pre-recession peak. This is a continuation of a long-term trend toward finance and away from manufacturing: over the last five years, overall GDP growth has averaged 4.2 percent per year, while the finance and insurance sector has averaged 9.8 percent and manufacturing has averaged just 1.8 percent growth annually.
For a more in-depth analysis, read our latest Latin America Data Byte.