DESK REVIEWS | 01.03.02. Composition of the economy

DESK REVIEW | 01.03.02. Composition of the economy

Brazil’s GDP in 2018 was US$1.6 trillion. The country’s economy is composed of services (the main productive sector), followed by industry (e.g.: textiles, shoes, chemicals, cement, lumber, iron ore, tin, vehicles etc.); and agriculture (e.g.: coffee, soybeans, wheat, rice, corn, sugarcane, cocoa, citrus and beef) (Brazilian Institute of Geography and Statistics, 2019i, 2019h).

References:

Brazilian Institute of Geography and Statistics. (2019h). Produto Interno Bruto—PIB | IBGE. https://www.ibge.gov.br/explica/pib.php

Brazilian Institute of Geography and Statistics. (2019i). SIDRA – Tabela 1846: Valores a preços correntes.

The GDP composition by sector of origin shows that the services accounted for 53.9% of GDP in 2017-18, while industry, agriculture, and manufacturing accounted for 29.1%, 17.1%, and 16.7%, respectively, in the same year (Ministry of Finance, 2018).

References:

Ministry of Finance (2018). Contribution of various sectors to GDP. Press Information Bureau. Government of India. Available from: https://pib.gov.in/newsite/PrintRelease.aspx?relid=186413

In 2017, the majority of GDP was produced in services (45.4%), followed by industry (41%), and agriculture (13.7%). Industry in Indonesia is active in the areas of ‘petroleum and natural gas, textiles, automotive, electrical appliances, apparel, footwear, mining, cement, medical instruments and appliances, handicrafts, chemical fertilizers, plywood, rubber, processed food, jewellery, and tourism’. Agricultural products include ‘rubber and similar products, palm oil, poultry, beef, forest products, shrimp, cocoa, coffee, medicinal herbs, essential oil, fish […] and spices’ (CIA World Factbook, 2019).

References:

CIA World Factbook. (2019). Indonesia. https://www.cia.gov/the-world-factbook/countries/indonesia/

In spite of the political instability in Kenya, tourism accounted for 20% of the economy, demonstrating the significance of this sector in the country’s economy (Central Intelligence Agency, 2019). The agriculture, service, industry, and private consumption sector are also quite significant as mentioned in 01.03.01.

References:

Central Intelligence Agency. (2019). The World Factbook: Africa – Kenya. https://www.cia.gov/the-world-factbook/countries/kenya/

The services (tertiary) sector is the largest part of the economy, representing 61% of GDP in the third semester of 2018. The secondary sector (comprising mining, manufacture, construction, gas, and electricity) and the primary sector (agriculture, fisheries, cattle and livestock, and forestry) represent 31.4% and 3.1% of GDP, respectively[1]. Of the primary sector, 65% corresponds to livestock activities. The primary sector is one of the sectors, which receives the least foreign investment and, while it continues to develop, it has lagged compared to other sectors of the economy.

Oil production[2] is one of the main components of the secondary sector. To date, Mexican oils (Petroleos Mexicanos), PEMEX is the largest company in Mexico, the largest tax contributor, and remains as the main source of public funds – around 30% to 40% depending on the international price of oil barrel. However, PEMEX also has a large debt (due to net losses). Within the secondary sector, the manufacture industry and construction are two areas with large participation in the overall economy, representing with 54.7% and 24.3% of the sector, respectively. Within manufacturing, the auto-industry, largely concentrated on exports, represents 22% of all manufactures and 12% of total product within this sector (INEGI, 2018d).

The third (services) sector includes commerce, restaurants, hotels, transportation, communications, financial and personal services, as well as health and education. It has grown at an average annual increase rate of 3% in the period 2003-2016. The sector is comprised by very small businesses, largely self-employed, as well as large companies and multinationals using cutting-edge technology (CEFP, 2018; INEGI, 2018d).

Despite the most recent global economic crisis, decreasing oil prices and government income, Mexico’s economy has maintained a slight economic growth. This economic performance has been supported by internal demand and is the result of important structural reforms and solid macroeconomic policies that have generated low or decreasing inflation and interest rates, and increased per capita income (OECD, 2017a).

[1] Producto Interno Bruto, PIB

[2] Production remained a government monopoly through the company Petroleos Mexicanos (PEMEX) until recent reforms in 2013 when production was open to private investment.

References:

CEFP. (2018). Evolución de la Actividad Productiva Nacional y de las Entidades Federativas 2003-2018. https://www.cefp.gob.mx/publicaciones/documento/2018/cefp0222018.pdf

INEGI. (2018d). Sistema de Cuentas Nacionales de México. Producto Interno Bruto Trimestral. Año Base 2013. Tabulados básicos. https://www.inegi.org.mx/programas/pib/2013/#Documentacion

OECD. (2017a). Estudios Económicos de la OCDE México (OCDE Publishing, Ed.). OCDE Publishing. https://www.oecd.org/eco/surveys/mexico-2017-OECD-Estudios-economicos-de-la-ocde-vision-general.pdf