Brazil's economy rebounded in the January-March quarter, expanding 1.1% compared with the previous three months, official statistics showed. That result edged past the 1.0% growth predicted by economists surveyed in a Reuters poll.
The upturn in activity was underpinned by stronger household consumption and a notable increase in investment, occurring alongside a tight labor market and stepped-up government stimulus. The gain follows a lackluster second half of last year, when revised IBGE figures show growth of 0.3% in the fourth quarter and 0.1% in the third quarter.
Demand-side contributors
Household spending, which remains the main engine of demand, rose 1.0% in the quarter. The increase in disposable income that supported consumer activity was linked to policies enacted under President Luiz Inacio Lula da Silva, including an expanded income tax exemption targeted at middle-income households.
Investment, measured as gross fixed capital formation, climbed 3.5% in Q1, while government consumption increased 0.4%.
Supply-side performance
On the production front, agriculture recorded robust growth, with output up 2.0% in the quarter, helped by higher soybean volumes. Industry expanded 1.0%, with the extractive sector cited as the primary driver. Services continued to grow, rising 0.5% over the quarter.
Measured year-on-year, Brazil's gross domestic product rose 1.8%, matching market expectations.
The data depict an economy gaining traction after a subdued second half of the prior year, with consumer demand and investment providing the central momentum. The distribution of growth across sectors - stronger agriculture and extractive-led industry gains alongside steadier services expansion - outlines where activity concentrated during Q1.