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Brazil’s north region GDP grows 8x faster than national average

Staff Writer | April 25, 2018
With low inflation, falling interest rates and a stabilised economy, Brazil has returned to growth in all regions, with the north standing out as the fastest-growing one.
Brazil north region
LatAm   All main segments of the northern economy
A survey carried out by the Brazilian government to assess individual growth rates at each of the country's main geographic regions revealed that the north was by far the fastest-growing of the five.

All main segments of the northern economy (TV and electronics manufacturing, mining, retail and services) generated expressive wealth for the country in 2017, growing at a rate eight times higher than the national average.

The information comes from the Central Bank Economic Activity Index (IBC-Br), an indicator that attempts to predict the behaviour of Brazil's Gross Domestic Product before numbers are officially released.

The data also indicates that while the country grew 1% last year, the GDP of the North region advanced 8.23% - growing at Chinese levels. This is important because it shows that Brazil has been able to reduce regional inequality, even if gradually.

Amazonas, which accounts for 3% of the country's industry, presented significant numbers. Machinery and equipment manufacturing, for example, grew 31.6% last year; electronics and computer input output increased by 23.9%.

This performance, among other factors, may have been influenced by the proximity of the World Cup and the increased demand for televisions and other screens to watch the event.

The Manaus Industrial Complex alone produced R$ 81 billion in revenue last year, 9.41% higher than in 2016.

According to the Superintendence of the Manaus Free Trade Zone, the improvement observed means a recovery of the companies in the area, which had been facing reduced revenue numbers since 2014.

Exports at the zone also grew in 2017, and are now up 6.54%.

For the population, these numbers also meant more jobs. Industrial complex companies created 771 jobs last year.

More than good local performance, these figures signal the end of the recession in Brazil and the beginning of a more prosperous cycle, driven by government measures that helped the country emerge from the recession to a new scenario with low inflation, falling interest rates and a resumption of consumption and investments.

In practice, if the country needs more consumer goods, the Manaus Free Trade Zone will produce more. "We expect our manufacturing plants to be infected with the national economic recovery and present more significant and

consolidated growth," said Appio Tolentino, Superintendent of the Manaus Free Trade Zone.

The growth of the north is not restricted to Amazonas alone. In Rondônia, construction and commerce have helped move the economy and generate jobs.

Daniela Fernanda de Andrade, 21, was hired a month ago as a receptionist for a beauty salon in Porto Velho. After spending seven months looking for a job, she believes the country is much better in 2018.

"Things are more dynamic" in the city, she says, with many works in progress and companies opening up stores.

"Things are getting better when you talk about jobs because there is a lot of work going on in the city, and that is helping," she explained, adding that "for me, 2018 is already a good year; I started working again and am going to graduate as a nursing technician".

The state of Pará also helped boost the GDP of Northern Brazil. The state's industrial output grew 10.1% last year, chiefly driven by good performance in two sectors: mining, which grew 13.2%, and wood product manufacturing, up 3.2%.

The airport in state capital Belém also saw strong growth. Cargo movement with exports and imports sky-rocketed, nearly doubling in the first quarter of the year.

The terminal is also preparing to receive more airlines and increase passengers and cargo inflows in the near future.

“The results from the first quarter of the year exceeded all expectations for the period, indicating the continuity of the growth trend in cargo handling initiated during 2017, mainly with the acquisition of new customers in the IT, technology and shipbuilding segments," reports the Cargo Business Logistics coordinator at the airport, Emanoel Leite Junior.