ForecastingStocks

GDP — Gross Domestic Product, PIB in Portuguese (Produto Interno Bruto) — is the total value of all goods and services an economy produces in a period, usually a quarter or a year. It is the single broadest measure of economic activity.

What GDP actually adds up

You can think of GDP as the sum of everything spent in the economy:

Consumption — households buying goods and services (by far the largest piece).
Investment — businesses building factories, buying equipment, constructing housing.
Government spending — public salaries, infrastructure, services.
Net exports — exports minus imports.

When economists say the economy "grew 2.5%", they mean real GDP — adjusted for inflation — was 2.5% higher than the comparable prior period.

Why growth moves markets

Faster growth generally means rising corporate profits, which supports stock prices. It also tends to lift demand for a country's currency and can push inflation up, which in turn influences interest rates.

But the relationship is not linear. Too much growth can overheat an economy and stoke inflation, prompting a central bank to raise rates — which can hurt stocks even though the economy looks strong. Markets care less about the level of growth than about growth relative to expectations.

The Brazilian context

In Brazil, GDP is published quarterly by the IBGE (Instituto Brasileiro de Geografia e Estatística). Brazil's growth is heavily influenced by commodities (agriculture, mining, oil), domestic consumption and the credit environment set by the SELIC rate. A strong harvest or high iron-ore prices can lift national GDP and the real together.