(MENAFN - AFP) Brazil, Latin America's leading economy, expanded 1.5 percent in the second quarter of 2013 compared with the previous three month, exceeding the most optimistic market expectations, official statistics showed on Friday.
Economists, who had expected GDP growth of between 0.7 percent and 1.3 percent, said the second quarter result would be the best this year.
The farm sector fared best, growing 3.9 percent, followed by industry with two percent and services 0.8 percent, the Brazilian Institute of Geography and Statistics (IBGE) said on its website.
Investments rose 3.6 percent while consumption edged up a paltry 0.3 percent during the period.
Compared with the second quarter of last year, GDP expanded 3.3 percent.
"The GDP result was a good surprise. Investments had a good performance and this is very good for the economy," economist Guilherme de Nobrega, of the Indusval & Partners Corretora brokerage firm, told the G1 news website.
"It seems that this will be the climax in the performance of the year, but even so, we are emerging from the swamp of low investment," he added.
"The reduction of inflation and the resumption of growth, all this is beginning to dissipate the grey clouds that had gathered over our country," Finance Minister Guido Mantega said overnight at an event in Sao Paulo.
The Brazilian economy grew an anemic 0.9 percent in 2012.
This year, the government and the International Monetary Fund are banking on 2.5 percent GDP growth while market analysts are forecasting 2.2 percent.
"The government's intervention and a weaker management of Brazil's macro-economic policy have affected investors' confidence and contribute to tepid growth prospects in the medium term," said Robert Wood, a Brazil expert at the Economist Intelligence Unit in New York.
Wood, who is banking on a two percent GDP growth for Brazil this year, said Latin America's behemoth has been affected by recent capital outflows from emerging markets, slower growth in China (Brazil's main trading partner) and the impact of massive street protests to demand better public services and an end to political corruption last June.
"The growth of domestic consumption will be rather low, given the surging inflation and the monetary adjustment," he added in a statement sent to AFP.
"We expect the electoral cycle and the World Cup to lift the economy in 2014, but not much due to weak confidence among investors," Wood said.
In 2011, the country posted 2.7 percent GDP growth after a sizzling 7.5 percent in 2010.
Meanwhile, the Central Bank pressed on with its efforts to rein in inflation, which reached 6.27 percent on an annualized basis in July, close to the 6.5 percent upper limit of the government target.
Wednesday, the bank raised its benchmark interest rate half a percentage point to 9 percent.