The Brazilian economy grew 0.1 percent in the third quarter of 2025 compared to the second quarter.

Compared to the third quarter of 2024, the Gross Domestic Product (GDP), which is the total value of goods and services produced in the country, rose 1.8 percent.

In the last four quarters, GDP grew 2.7 percent.

The data were released on Thursday (Dec. 4) by the Brazilian statistics agency IBGE.

The quarterly increase of 0.1 percent is considered by IBGE to be stable, that is, not significant. However, the result marks the 17th consecutive quarterly expansion.

According to the agency, GDP reached BRL 3.2 trillion.

Sectors

From the second to the third quarter, industry posted the highest growth (0.8%), followed by agriculture (0.4%). The performance of services, which account for the largest share of GDP, remained virtually unchanged at 0.1 percent.

Analyzing the performance of activities within the services sector, the key highlights were:

• Transportation, storage, and mail: 2.7 percent
• Information and communication: 1.5 percent
• Real estate activities: 0.8 percent

IBGE Quarterly Accounts analyst Claudia Dionísio explains that the performance of the transportation sector reflects the flow of mineral and agricultural production.

In the quarter, commerce, which is also part of the services sector, grew by 0.4 percent.

In the industrial sector, extractive industries grew by 1.7 percent, construction by 1.3 percent, and manufacturing by 0.3 percent, while the electricity and gas, water, sewage, and waste management segment declined by 1.0 percent.

On the expenditure side, household consumption remained virtually stable, increasing by 0.1 percent, while government consumption grew by 1.3 percent.

Gross Fixed Capital Formation (GFCF), an indicator measuring the expansion of a country’s productive capacity through investment, rose by 0.9 percent.

What does gross domestic product (GDP) represent?

GDP is the total value of all goods and services produced in a given location over a specific period. This measure allows for tracking the economic performance of a country, state, or city, as well as making international comparisons.

GDP is calculated using various sectoral surveys, such as those for trade, services, and industry.

During GDP calculation, care is taken to avoid double counting. For example, if a country produces BRL 100 of wheat, BRL 200 of wheat flour, and BRL 300 of bread, the GDP will be BRL 300, since the values of the wheat and flour are already included in the value of the bread.

The final goods and services that make up GDP are measured at the prices at which they reach consumers, including any taxes levied.

GDP helps to understand a country’s economic reality, but it does not reflect factors such as income distribution or living conditions. For example, a country may have a high GDP but a relatively low standard of living, while another may have a low GDP and a very high quality of life.

More than 8.6 million Brazilians left the poverty line in 2024. This socioeconomic performance brought the share of the population living in poverty down from 27.3 percent in 2023 to 23.1 percent. It is the lowest level recorded since 2012, when the Brazilian statistics agency IBGE began compiling these data.

In 2024, Brazil had 48.9 million people living on less than USD 6.85 per day, equivalent to about BRL 694 per month, adjusted for inflation that year. This is the threshold the World Bank uses to define the poverty line. In 2023, 57.6 million Brazilians were living in poverty.

The data are part of the Summary of Social Indicators survey, released on Wednesday (Dec. 3).

The indicators show a third consecutive year of decline in both the number and proportion of poor people, marking a post-pandemic recovery from the COVID-19 crisis that began in 2020.

See how poverty has evolved in the country:

• 2012: 68.4 million
• 2019: 67.5 million (last year before the pandemic)
• 2020: 64.7 million
• 2021: 77 million
• 2022: 66.4 million
• 2023: 57.6 million
• 2024: 48.9 million

In 2012, the proportion of people below the poverty line was 34.7 percent. In 2019, it stood at 32.6 percent. In the first year of the pandemic (2020), it fell to 31.1 percent and reached its highest point in the series in 2021, at 36.8 percent. Since then, it has declined year after year, from 31.6 percent in 2022 to 23.1 percent last year.

Work and income transfer

IBGE researcher André Geraldo de Moraes Simões, responsible for the study, explained that in 2020, the year the pandemic broke out, poverty declined because of emergency assistance programs, such as Emergency Aid, paid by the Brazilian government.

“These benefits returned in April 2021, but with lower amounts and more limited access, and the labor market was still fragile, so poverty increased,” said Simões.

According to him, beginning in 2022, the labor market started to recover, accompanied by assistance programs with higher benefit amounts, factors that supported socioeconomic improvement.

“The combination of a stronger labor market and expanded income-transfer programs - mainly Bolsa Família and Auxílio Brasil, which rose in value and reached more people - contributed to this outcome,” he noted.

In the second half of 2022, the Auxílio Brasil program began to pay BRL 600 per month to low-income families. In 2023, the program was renamed Bolsa Família.

Extreme poverty

In the last year, Brazil also saw a decline in extreme poverty, defined as living on an income of up to USD 2.15 per day, or about BRL 218 per month when adjusted for last year’s values.

From 2023 to 2024, this contingent fell from 9.3 million to 7.4 million, meaning that 1.9 million people left this condition. This evolution caused the proportion of the population in extreme poverty to drop from 4.4 percent to 3.5 percent, the lowest level ever recorded.

In 2012, when these data began to be compiled, the rate stood at 6.6 percent. In 2021, it reached 9 percent, equivalent to 18.9 million people.

Regional inequality

The IBGE figures clearly show regional inequality: both poverty and extreme poverty in the North and Northeast remain above the national rate.

Poverty
• Northeast: 39.4 percent
• North: 35.9 percent
• Brazil: 23.1 percent
• Southeast: 15.6 percent
• Midwest: 15.4 percent
• South: 11.2 percent

Extreme poverty
• Northeast: 6.5 percent
• North: 4.6 percent
• Brazil: 3.5 percent
• Southeast: 2.3 percent
• Midwest: 1.6 percent
• South: 1.5 percent

“These are the country’s most vulnerable regions, and this is also reflected in their labor markets,” says André Simões.

Another inequality highlighted in the survey is racial: among white Brazilians, 15.1 percent were living in poverty, and 2.2 percent in extreme poverty.

Among black Brazilians, poverty reached 25.8 percent, and extreme poverty 3.9 percent. Among the mixed-race population, the figures were 29.8 percent and 4.5 percent, respectively.

Lowest Gini since 2012

The Summary of Social Indicators updated the so-called Gini Index, which measures income inequality. The index ranges from 0 to 1 - the higher the number, the greater the inequality.

In 2024, the Gini Index reached 0.504, the lowest value since these data began to be compiled in 2012. In 2023, it stood at 0.517.

To measure the impact of social programs on reducing inequality, IBGE presented a calculation of what the Gini Index would be if there were no welfare policies.

The study found that the indicator would be 0.542 if there were no income-transfer programs, such as Bolsa Família and the Continuous Cash Benefit (BPC), which provides one minimum wage per month to seniors aged 65 or older or to people with disabilities of any age.

Another hypothetical exercise carried out by the researchers examined the situation of people aged 60 or over if there were no social security benefits.

Extreme poverty among the elderly would rise from 1.9 percent to 35.4 percent, the institute projects. Poverty would increase from 8.3 percent to 52.3 percent.

The survey also shows that poverty was more prevalent among informal workers. Among those employed without a formal contract, one in five (20.4%) were poor. Among workers with a formal contract, the share was 6.7 percent.

Brazil recorded its best results in income, inequality, and poverty since this time series began in 1995, according to a technical note from the Institute for Applied Economic Research (Ipea). The study was released this Tuesday (Nov. 25) with data from the Brazilian government’s statistics agency, IBGE.

Over 30 years, per capita household income grew by about 70 percent, the Gini coefficient fell by nearly 18 percent, and the extreme poverty rate dropped from 25 percent to less than 5 percent.

Progress was uneven, concentrated between 2003 and 2014, and then resumed strongly between 2021 and 2024. After a prolonged cycle of crises between 2014 and 2021 – marked by recession, slow recovery, and the severe impact of the pandemic – per capita income reached its lowest level in a decade.

The trajectory changed from 2021 onwards: in three consecutive years, average income grew by more than 25 percent in real terms, accompanied by a significant drop in inequality.

“The results show that it is possible to intensely reduce poverty and inequality, but that these movements can also be interrupted or even reversed by various factors. And that it is important to combine different means to achieve these fundamental national objectives,” highlighted Marcos Dantas Hecksher, one of the authors of the study.

Researchers attribute the recent improvement to a booming labor market and the expansion of income transfers, both responsible for almost half of the reduction in inequality and the fall in extreme poverty between 2021 and 2024.

Programs such as Bolsa Família income transfer program, Benefício de Prestação Continuada (Continuous Cash Benefit - BPC), Auxílio Brasil (Brazil Aid), and Auxílio Emergencial (Emergency Aid) became more effective after 2020.

However, the impact of transfers weakened in 2023 and 2024 with the end of the expansion cycle, while the labor market continued to exert a strong influence on social indicators.

“Inequalities need to be combated through all public policies - not only through better targeting of social spending to the poorest, but also through a fairer distribution of taxes,” said Hecksher.

In 2024, the country recorded the lowest poverty levels in the series, yet 4.8 percent of the population lived below the extreme poverty line (USD 3 per day) and 26.8 percent below the poverty line (USD 8.30 per day).

More than 60 percent of the reduction in extreme poverty between 2021 and 2024 resulted from improved income distribution, according to the study’s breakdown.

The technical note points out that the progress observed in the post-pandemic period is likely to lose momentum with the end of the expansion of social welfare policies, making the labor market even more decisive in the coming years.

The authors warn that household surveys tend to underestimate very high incomes and some social transfers, requiring caution when interpreting the results.

The document concludes that the recent period represents an important structural change: after years of stagnation or regression, income, inequality, and poverty indicators have all improved simultaneously and rapidly.