Lula celebrates 3.4% GDP growth in 2024: 'more jobs and income for Brazilians'
President reiterates what has been his mantra in recent months: “2025 is the year of the harvest”
247 - President Luiz Inácio Lula da Silva celebrated on Friday (7) the 3.4% growth of Brazil’s Gross Domestic Product (GDP) in 2024, according to data released by the Brazilian Institute of Geography and Statistics (IBGE). In a social media post, Lula emphasized the importance of this result for the labor market and reinforced a message he has been repeating since the beginning of the year: "2025 is the year of the harvest."
"Growing GDP means more jobs and income in the hands of Brazilians. 2025 is the year of the harvest," the president wrote.
GDP grows 3.4% in 2024, reaching R$ 11.7 trillion
Brazil’s GDP reached R$ 11.7 trillion in 2024, recording a 3.4% increase compared to the previous year. The growth was driven by the services and industrial sectors, marking the country’s best economic performance since 2021. In the last quarter of the year, GDP increased by 0.2% compared to the previous period, showing stability in the economic expansion pace.
According to Rebeca Palis, IBGE’s National Accounts coordinator, the main contributors to this growth were “other service activities” (5.3%), manufacturing industry (3.8%), and trade (3.8%), which accounted for about half of the total GDP growth in 2024.
Industry and services advance, but agriculture declines
The industrial sector grew 3.3% during the year, with construction standing out with a 4.3% increase, driven by job creation, higher production of inputs, and expanded credit availability. The manufacturing industry also performed well, rising by 3.8%, while the electricity, gas, water, sewage, and waste management sector grew 3.6%.
The services sector, which represents the largest share of Brazil’s economy, grew 3.7%, consolidating itself as the main driver of GDP growth in 2024. Segments such as trade, transportation, and financial services performed well, reflecting the resumption of consumption and increased goods circulation.
On the other hand, agriculture saw a 3.2% contraction, affected by adverse weather conditions that impacted the productivity of key crops. Soybeans, Brazil’s main agribusiness product, experienced a 4.6% drop in annual production, while corn fell even further, with a 12.5% decline.
Household consumption drives growth
The main factor behind GDP growth in 2024 was household consumption spending, which increased 4.8% compared to 2023. This positive result was influenced by government income transfer programs, labor market improvements, and lower interest rates throughout the year.
Productive investments, measured by Gross Fixed Capital Formation (GFCF), grew 7.3%, while government spending increased by a more modest 1.9% over the year. In the external sector, imports of goods and services grew 14.7%, while exports rose 2.9%.
The investment rate rose to 17.0% of GDP, up from 16.4% in the previous year, while the savings rate fell to 14.5%.
Fourth quarter shows economic stability
In the last three months of 2024, GDP grew 0.2% compared to the previous quarter. The industrial sector expanded by 0.3%, and services grew by 0.1%, while agriculture declined by 2.3%.
According to Rebeca Palis, the economic performance in the last months of the year reflected a stable scenario but with challenges, such as the impact of inflation on household consumption.
"In the fourth quarter of 2024, what stands out is that GDP remained practically stable, with investment growth but a decline in household consumption. This is because we saw a slight acceleration in inflation, especially food prices. The labor market continued to improve, but at a slower pace. Additionally, interest rates began to rise in September last year, which already impacted the fourth quarter," she explained.
In the industrial sector, the highlights were construction (2.5%), manufacturing (0.8%), and extractive industries (0.7%). On the other hand, the electricity, gas, water, and sewage segment fell by 1.2%.
Among services, transport, storage, and postal services grew 0.4%, while trade advanced 0.3%. Financial activities, insurance, and communication had negative performances.
Outlook for 2025
Despite the positive economic performance in 2024, analysts warn of challenges ahead in 2025. An uncertain global scenario, the possibility of higher interest rates, and a slowdown in domestic consumption could impact growth.
However, continued infrastructure investments, a strong labor market, and credit incentive measures could support moderate economic growth. With the services sector leading expansion and a gradual recovery in industry, Brazil enters 2025 with a stronger GDP, though challenges remain to sustain growth.