Brazil's GDP grew 2.9% in 2022, but the slowdown in the last quarter worries the government

A Petrobras service station in Salvador de Bahía. RAFAEL MARTINS (AFP)

Brazil's GDP grew by 2.9% in 2022, driven mainly by the services sector, which grew by 4.2%, the Brazilian statistics institute reported on Thursday.

Industry grew by 1.6% and the agricultural and livestock sector fell by 1.7%, dragged down by the poor soybean harvest.

The growth, in general, occurred mainly due to the reopening effect after the end of the restrictions due to the pandemic in tourism, bars, restaurants, etc.

The significant injection of money that the social assistance launched during the health emergency and subsequent crisis also had an influence.

But despite the positive data, there is a warning sign: in the last quarter the Brazilian economy fell by 0.2%, evidencing the gradual slowdown throughout the year.

The president, Luiz Inácio Lula da Silva, lamented this Thursday that the economy "did not grow at all" in the final stretch of last year, and assured that he will not allow paralyzed works, insisting on the strategy of prioritizing public investment in infrastructures to stimulate the economy.

For the Minister of Economy, Fernando Haddad, of the Workers' Party (PT), it is necessary to mobilize urgently.

“Now we are on a downward curve and the entire challenge for the Ministry of Economy is to reverse that picture and promote an upward curve in GDP growth.

We are not working with the prospect of recession, but obviously, keeping interest rates at that level triggers a slowdown in the economy, ”he said Thursday.

Thus, we return to the debate on interest rates, which the Central Bank maintains at 13.75%, a percentage that the Government considers extremely high, an obstacle to investment and economic growth.

The planning minister, Simone Tebet, of the center right, assured that the growth of GDP in 2022 above expectations should bring a "positive gesture in favor of Brazil" from the Central Bank.

The next monetary policy meeting of the Central Bank will take place on March 21 and 22.

Until then, the Executive will make an effort to show the bank (which has enjoyed total independence since the Government of Jair Bolsonaro) that it is possible to reduce the price of money.

The release of the GDP result has almost eclipsed the other big economic data of the week.

The oil company Petrobras closed 2022 with a net profit of 188.3 billion reais (36.27 billion dollars, 34.25 billion euros), a result 77% higher than the previous year.

The company attributes this to the high prices of Brent oil on the international market as a result of the war in Ukraine and to the agreements with other oil companies to co-participate in the exploitation of oil in Brazilian fields.

The figure represents a record not only in the history of the oil company, but among all the companies listed on the São Paulo Stock Exchange.

The voluminous result did not take long to generate criticism of the role of the company, which has the Brazilian State as its majority partner.

Petrobras reported that it will distribute 215,700 million reais (41,548 million dollars, 39,235 million euros) among its shareholders.

With this money, the budget of the Bolsa Família program (of social assistance to the poorest) could be financed three times in all of 2023.

Precisely when presenting the new details of this social program, Lula classified the news of the oil company's record profit as "unacceptable" and stressed that the company should invest at least half of that money in the growth of the country, in the naval industry, of oil and gas.

“Brazilian companies and Brazilian banks have to think first about this country and then think about their profits or their shareholders.

From now on it will be like this, so that we can change the history of this country, ”he criticized.

Lamentations towards Petrobras already occurred during the Bolsonaro administration, when the company raised fuel prices while announcing huge benefits.

One of Lula's campaign promises was,

The company continues to be guided exclusively by the price of oil in the international market, and this week announced a reduction in sales prices at refineries, of 3.92% in the case of gasoline and 1.95% for diesel .

In this way, he will help to hide, in part, the return of federal taxes on fuel, which Bolsonaro eliminated in the midst of the rise in inflation for fear that the price hike would harm his electoral prospects.

The fuel tax exemption started in March 2022 and should have lasted until December.

In January of this year, Lula extended it until December 2023 in the case of diesel and cooking gas, but in the rest, the truce ended on February 28.

The government's economic team was more vehemently advocating the return of taxes to help balance the books, but the more political wing feared the impact on public opinion of this consumer penalty.

After the tug of war, the decision came at the last minute and was more or less Solomonic, a partial return.

Gasoline, because it is more polluting, will be taxed more, 0.47 reais (0.091 dollars, 0.085 euros) per liter, while ethanol, a biofuel, will be priced at 0.02 reais (0.0039 dollars, 0.0036 euro) per litre.

These rates will be valid until June, in July they could go up.

Natural gas for vehicles and kerosene for airplanes will continue without paying taxes for another four months.

Follow all the international information on