Northeast region leads Brazil’s economic activity index
The North and Southeast regions, both with a rate of 3.1%, come next. The South region had an increase of 1.4%. And the Central-West region did not show an increase in economic activity during the period.
Economist Werton Oliveira, from Ekonomy Consultoria Econômica, in João Pessoa (PB) lists several factors that contributed to the economic growth of the Northeast at the beginning of 2024, such as the reduction in unemployment in the region.
“We can see that a large part of this growth is due precisely to the drop in unemployment rates here in the region. Consequently, it has raised the level of real average income and influenced family consumption, which directly impacts the level of local activity,” says Werton.
According to the analysis by the Technical Office for Economic Studies of the Northeast (Etene) – a research area of the Banco do Nordeste –, the advance in Commerce and Services favored economic activity in the Northeast at the beginning of the year.
Ceará leads growth
Among the northeastern states, Ceará showed the highest growth in the index, being 4.4% in the 1st quarter of 2024, compared to the same period of the previous year. For economist Werton Oliveira, Ceará’s result comes from a good performance of the local industry over time.
“Ceará has been performing well regionally for a long time. We have noticed a significant change in the local economy and this in itself has led to an improvement in economic indicators. This result for the first quarter only confirms what we have been observing, that over time, local industry, in particular, has performed well compared to other states in the region,” emphasizes Werton Oliveira.
The advisor to the Regional Economic Council (Corecon-CE), Davi Azim Filho, highlights the role of the services sector in the economy of the state of Ceará and mentions other aspects that contributed to the index.
“Our vocation, in terms of economics, is really geared towards the service sector. Just look at the state of Ceará’s Gross Domestic Product. The service sector really contributes significantly to the result. When we also evaluate some detailed aspects, when we check the services provided to families, we see that artistic occupations and other services geared towards personal matters are also included. This also contributes to this index,” says Azim.
According to Davi Azim Filho, for the results to demonstrate real economic development for Ceará, it is also necessary to analyze whether there is an increase in the income of Ceará workers in the state.
“We need to carefully analyze whether there is an increase in income, whether there really is a better distribution of income in the state, in a more homogeneous way, so that this good performance really means economic development and also means a higher level of income for workers in Ceará,” Azim points out.
According to Etene, the growth of Ceará’s economy is linked, in particular, to the increase in retail sales (9.1%). Davi Azim Filho highlights the influence of the sector, but warns of possible family debt due to the availability of credit.
“Retail growth is always closely linked to a greater supply of credit to consumers, or even a slight increase in income; people are sometimes unemployed and start to have some kind of job. Of course, this level of economic activity does have a contribution to this, but what is also worrying is the issue of debt among families in Ceará. People need to have financial education,” explains Azim.
In relation to other states in the northeast, Bahia showed an increase of 3.1% in the state activity index. Pernambuco showed an increase of 2.5%, according to the Bacen economic activity index.
Next months
Economist Werton Oliveira assesses that the economic outlook for the next quarter is positive, given the drop in unemployment and the increase in household consumption.
“Considering the results of the labor market, with a drop in the unemployment rate and an increase in the population’s real income, we expect the economy of the Northeast to continue growing sharply in the coming semesters, precisely because of this good moment in family consumption. Therefore, family consumption greatly drives local growth, since we are a very strong region in this area, we do not have much industry like the Southeast. From a regional point of view, we see that we will have sharper growth in the next quarter”, says Werton Oliveira.
Corecon-CE advisor Davi Azim Filho points out that the results depend on the dynamics of the national economy.
“The expectation is that we will at least be able to maintain this economic activity as it is. But it will really be necessary to analyze how the national economy is doing to see the impacts that will occur on the state of Ceará and what the state’s fiscal situation will be like. If it is degraded, things will really not be so good for economic activity. The state of Ceará needs to increase its capacity to attract even greater private investment so that we can create a more favorable environment,” emphasizes Davi Azim Filho.
By Brasil 61
