June 7th, 2024


1. Brazilian GDP grows 0.8% in the first quarter of 2024, led by the service sector

According to the Brazilian Institute of Geography and Statistics (IBGE), the Brazilian Gross Domestic Product (GDP) grew 0.8% in the first three months of 2024. Compared to the same period of 2023, there was 2.5% growth, amounting to R$2.7 trillion from January to March. This increase was mostly led by the service sector, which registered 1.4% growth in the period.

The commerce subsector stood out in the service sector, with 3% growth. This is a reflection of an increase in consumption and improved employment rates. Furthermore, the Information and Communications sector grew by 2.1%, while other activities within the service sector grew by 1.6%. The agriculture sector also registered a positive performance with 11.3% growth, even though the industrial sector registered a slight drop of 0.1%.

In 2023, the Brazilian GDP registered 2.9% growth, amounting to R$10.9 trillion, placing the country among the 10 largest economies in the world. The International Monetary Fund’s (IMF) projections indicate that Brazil will grow even more and end 2024 as the 8th largest global economy, remaining in the position until 2029. This optimistic perspective is thanks to the continuous positive performance of the service and investment sectors, especially when it comes to the importation of capital goods, software development, and civil construction.

Agência Brasil: PIB do Brasil cresceu 0,8% no primeiro trimestre de 2024, aponta IBGE
G1: PIB do Brasil sobe 0,8% no 1° trimestre de 2024 puxado por comércio, diz IBGE
Exame: Brasil deve subir uma posição e fechar 2024 como a 8ª maior economia do mundo, estima FMI

2. Central Bank projects higher inflation and interest rates for next few years

According to reports by the Brazilian Central Bank, economists in the financial market expect a reduction in interest rates from 10.5% to 10.25% per annum, despite expectations for higher inflation rates. The projections for the Extended Consumer Price Index (IPCA) were increased to 3.88% in 2024, 3.77% in 2025, and 3.60% in 2026, maintaining the tendency of growth observed in the past few weeks.

In the edition of Boletim Focus published on Monday (June 3), the Central Bank also adjusted its predictions for the Selic rate, increasing it from 10% to 10.24% in 2024 and from 9% to 9.18% in 2025, maintaining the rate at 9% in 2026 and 2027. The inflation rate for rent prices (IGP-M) was altered to 2.9% in 2024. GDP projections were kept at 2.05% for 2024, with an expectation of growth from 0.4% to 1% in the first quarter despite the negative impact of the Rio Grande do Sul tragedy.

Valor Econômico: Análise: Economistas ainda preveem um corte de juro mesmo com inflação acima da meta
O Globo: No Boletim Focus, analistas projetam inflação e juros mais altos

3. Number of global IPOs fell 7% in Q1 2024, but funds raised increased 

A study by EY reveals the number of global initial public offerings (IPOs) decreased by 7% in the first quarter of 2024, falling from 307 to 287 deals. However, the volume of funds raised through these offerings increased by 7%, going from US$22.1 billion to US$23.7 billion.

The Asia-Pacific region was the main contributor to the decline in the number of IPOs, with a 34% decrease in offers and a 56% drop in revenue. This is due to the unfavorable market conditions, which include capital outflows and the temporary halt of IPOs in China, as well as high interest rates in Hong Kong.

On the other hand, the Americas registered an increase in the number of offerings and the amount of funds raised. In Brazil, there is an expectation for IPOs to resume in the second half of 2024, after two years without new listings.

Valor Econômico: Número de IPOs no mundo cai 7% no 1° trimestre, mas volume captado com ofertas cresce, diz EY

4. Number of active credit cards in Brazil exceeds total population, Central Bank report reveals

On Tuesday (June 4), the Central Bank published the report “Retail Payments and Card Statistics in Brazil,” which reveals that Brazil had 212,305,000 active credit cards in 2023 – a 3.3% increase compared to the previous year. This growth represents a significant slowdown compared to previous years. In 2021, there was a 36% increase and in 2022, 12.5%. However, the number of credit cards in Brazil exceeds the total number of Brazilians (which is 203.1 million, according to the 2022 Census).

Furthermore, 481,010,000 credit cards were issued in 2023, with an activation rate of 44.1%, the lowest since 2011. However, the number of debit cards decreased by 5.6%, amounting to 165,521,000, affected by the growing popularity of Pix. Analysts suggest that, although Pix has not yet significantly affected the use of credit cards, this could change as new functions for the instant payment system are implemented.

Valor Econômico: Brasil tem 212 milhões de cartões de crédito ativos, mais do que a população total

5. Study shows states with highest and lowest rates of water waste

On Wednesday (June 5), World Environment Day, Instituto Trata Brasil (ITB) published the “2024 Water Loss Study,” which revealed that the North and Northeast regions are the most vulnerable when it comes to treated water waste and basic sanitation. Based on data from the National Sanitation Information System (SNIS), the study reveals that these regions face greater difficulties when it comes to water and sewage management.

Among Brazil’s 27 state capitals, only Goiânia and Campo Grande registered water distribution loss rates below the 25% target. Porto Velho and Macapá had the worst rates, with losses above 70%. Overall, 14 out of 100 of the most populous municipalities in Brazil managed to keep losses below 25%, indicating a significant potential for improvement in sanitation systems.

The states in the South, Southeast, and Central-West have results that are better than the national average, with Goiás, Rio de Janeiro, Mato Grosso, the Federal District, and São Paulo standing out. On the other hand, Sergipe, Roraima, Rondônia, Acre, and Amapá reported the highest loss rates, which highlights the urgent need for investments in infrastructure and water management in the North and Northeast regions.

Exame: Dia Mundial do Meio Ambiente: conheça os estados com maior e menor desperdício de água