IT sector contributes to GDP growth in Brazil

The sector has seen a 12.3% increase and boosted the country's services industry in 2021
Written by Angelica Mari, Contributing Writer

The information technology sector has contributed to GDP growth in Brazil, according to official numbers released by the Brazilian Institute of Geography and Statistics (IBGE) on March 4.

At 8.7 trillion Brazilian reais ($1.7 trillion), Brazil's GDP has grown 4.6% last year compared to 2020, according to IBGE. The IT and telecommunications sector was among the best performers of the Latin economy, with 12.3% growth in 2021, contributing to a boost to the services industry overall. 

This compares with agribusiness, a key sector for the Brazilian economy, which has seen a decline of 0.2% last year.

According to IBGE, business activity in the information and telecommunications sector had been on the rise since start of the COVID-19 crisis. It gathered pace throughout 2021, largely driven by the need for remote work and study. 

The positive performance of the IT sector in Brazil follows a growth trajectory seen in the last three years, as digital transformation within companies accelerates. When it comes to revenue, the country's information technology sector has reached 426.9 billion reais ($76.7 billion) in 2020 -- the equivalent of 5.6% of the country's GDP. Most of it is generated in the São Paulo state, according to research.

The IT and telecommunications sector in Brazil is poised to grow 8.2% in 2022, according to predictions made in February by analyst firm IDC. The research company estimates IT alone will see 10.6% growth and telecoms will see a 4% boost.

"Expectations for growth in the Brazilian ICT market in 2022 are the highest for the last eight years, despite a scenario of moderate economic growth in Latin America and a period of elections in our country", said Denis Arcieri, country manager at IDC Brazil, when the predictions were announced.

According to IDC, growth in the Brazilian IT sector should be driven by device sales, while growth in the telecom will stem from mobile data sophistication, as well as the ramifications of the roll-out of 5G. Growth drivers for the enterprise IT sector will be a reflection of cloud maturity in the country, as well as an acceleration of the IT services market and a positive outlook for the software industry.

Another area of growth for tech companies in Brazil is security. According to a separate study by IDC, overall security spending is expected to reach nearly $1 billion in Brazil this year, an increase of 10% in relation to 2020. Of that total, spending on security solutions will reach $860 million, the company said, with cloud security becoming a key area of focus for Brazilian IT decision-makers.

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