Brazil economy decelerates in third quarter, still at top level

BRASILIA Reuters - Brazil's economy decelerated in the third quarter, with a lower than expected growth, but still enough to place it at the highest level of the series since starting in 1996.

The country's gross domestic product rose 0.4% in the three months to September, government statistics agency IBGE said on Thursday, below the 0.7% growth predicted by economists polled by Reuters.

This quarter was the fifth consecutive quarter of expansion, bolstered by the services sector, and put the largest economy in Latin America 4.5% higher than the level before the epidemic, in the fourth quarter of 2019.

The loss of steam underscores the challenges ahead as the central bank tightens to battle inflation begins to weigh more heavily on activity, overshadowing the government stimulus ahead of the Oct. presidential elections this year that helped boost demand.

The performance in the third quarter was boosted by a 1.1% growth in the dominant services sector, while industry grew by 0.8% and agriculture fell 0.9%.

On the demand side, investment increased by 2.8%, government expenditure increased by 1.3% and consumer spending increased by 1.0%.

Brazil's GDP increased by 3.6% from the third quarter of 2021, while economists predicted a 3.7% increase.

IBGE also revised the second quarter to a 1.0% expansion over the previous quarter from the 1.2% reported previously. The first quarter's growth has gone up to 1.3% from 1.1% previously.