Brazil's President Jair Bolsonaro in Brasilia, Brazil, November 21 2019. Picture: REUTERS/UESLEI MARCELINO
Brazil's President Jair Bolsonaro in Brasilia, Brazil, November 21 2019. Picture: REUTERS/UESLEI MARCELINO

 Rio de Janeiro — Brazil’s economy,  Latin America’s largest,  picked up pace in the third quarter, official figures showed on Tuesday, beating expectations and offering relief to President Jair Bolsonaro who has made reviving growth a priority.

After stalling in the first three months of the year, the economy has now had two consecutive quarters of growth, the statistics agency said, steering clear of a recession that had seemed likely only months ago.

GDP expanded by 0.6% in the July-to-September period, compared with the revised 0.5% in the previous three-month period. It rose 1.2% from the same quarter in 2018.

An initial reading showing the economy contracted by 0.2% in the first quarter has also been revised to zero. The third-quarter figure beat expectations of analysts surveyed by the Brazilian economic daily Valor, who had predicted 0.4% growth.

Driving the acceleration was agriculture, industry and services, which grew 1.3%, 0.8% and 0.4%, respectively, from the previous quarter. Bolsonaro tweeted that the results showed “we’re on the right path”, referring to the ambitious economic reforms his ultraconservative government has been pushing through Congress since taking power in January.

Bolsonaro’s government and outside analysts both expected 1% growth for 2019, edging down from 1.1% in 2017 and a revised 1.3% in 2018.

That will be too little to put a dent in unemployment which affects 12.4-million Brazilians. But analysts expect stronger growth in 2020, and have raised their 2020 GDP estimates to 2.2% from 2%. After cutting interest rates to a new historic low of 5% in October, the central bank said it expected “some acceleration” in growth in the fourth quarter.

The figures come after US President Donald Trump announced plans on Monday to reimpose tariffs on steel and aluminium from Brazil and Argentina, apparently blindsiding Bolsonaro, who considers himself an ideological ally of the Republican leader.

Bolsonaro has sought to play down the issue, saying he would appeal to Trump for more understanding of Brazil’s position and boasting he has an “open channel” with the US leader if needed.

A wave of protests sweeping across Latin America has slowed the pace of reforms in Brazil, economy minister Paulo Guedes indicated in a recent interview with Brazil’s Globo.

“We were on a path. Then, suddenly, the confusion in Latin America started … the political timing begins to change,” Guedes said.