Brazil's GDP growth for 2023 is expected to undergo a significant revision, emphasizing the exceptional performance of the agricultural sector. In the first quarter of 2023, the country's economy surpassed expectations with a remarkable acceleration. GDP growth reached 4% year-on-year, surging to a six-quarter high and surpassing the previous quarter's growth of 1.9% year-on-year. The driving force behind this surge was the agricultural sector, which outperformed both the services and industry sectors. In Q1 2023, Brazil's agriculture output experienced a staggering 18.8% year-on-year growth, while the services and industry sectors saw increases of 2.9% and 1.9%, respectively.

Currently, the IMF predicts a modest 0.9% year-on-year growth for Brazil in the full year of 2023. However, this projection was made in April before the release of the Q1 GDP data. Consequently, the forecast will be revised upward in the upcoming autumn World Economic Outlook report.

The outstanding performance of the agriculture sector can be attributed to multiple factors, including the favorable impact of the low base effect. In Q1 2022, major crop regions in southern Brazil suffered from a drought, which set a lower benchmark for comparison in 2023.

Additionally, Brazil's state statistics office (IBGE) anticipates record-breaking agricultural production in 2023, particularly in soybean cultivation. Soybeans account for approximately 70% of the nation's crop production in the first quarter of each year. As of April 2023, estimates indicate an annual harvest of 149 million tons of soybeans, marking a remarkable 25.8% increase compared to April 2022.