The economy of Rio Grande do Sul had its second positive growth of the year in March, according to the RS Economic Activity Index (IAE-RS) released this Tuesday (23) by Central Bank (BC). The index rose 0.5% compared to February, driven mainly by the jump in industry (2.2%) and the start of the summer harvest (0.7%).
The performance of the Rio Grande do Sul industry was driven by the durable consumer goods sector, which recorded an increase of 5.2% in production. The agricultural sector, on the other hand, saw more modest growth of 0.2%, due to the drought that affected some regions of the state.
The IAE-RS shows that the economy of Rio Grande do Sul is gradually recovering, after having shown a contraction in 2023. The services sector, which represents the majority of activity economic of the state, is still in the process of recovery, with growth of only 0.1% in March.
Industry Growth Highlights
- Industry: Increased production of durable consumer goods, such as vehicles, household appliances and furniture;
- Agriculture: Start of the summer harvest, with emphasis on soybeans and corn;
- Services: Slow growth, but with gradual improvement in some segments, such as commerce and tourism.
Factors that contributed to growth
- Increased domestic demand for goods and services;
- Improved consumer and business confidence;
- Government fiscal stimulus;
- Harvesting the summer crop.
Challenges
- High inflation;
- High interest;
- Uncertainty in the international scenario;
- Drought in some regions of the state.
Perspectives
The expectation is that the economy of Rio Grande do Sul will continue to grow in the coming months, driven by the summer harvest and improved domestic demand. However, the outlook is still uncertain, and high inflation and interest rates could affect the pace of recovery.
The second positive growth of the Rio Grande do Sul economy in 2024 is a positive sign, but there are still challenges to be overcome. The government and the private sector need to work together to ensure the sustainability of the recovery and promote the development of the state.
Image: Reproduction/Internet
