Brazil’s economy grew more than expected in the first quarter of 2021, continuing its rebound from pandemic recession as many declined to hunker down amid COVID-19’s brutal second wave.

Health experts have said that heightened activity boosted COVID-19’s impact, and some have begun warning that a third wave may be taking shape. The nation’s daily death toll had receded from more than 3,000 a day in mid-April when Brazil was the virus’s global epicentre. According to Our World in Data, it remains the world’s second-highest at 1,850, an online research site.

“Even with the second wave of the COVID-19 pandemic, GDP grew in the first quarter, given that, unlike last year, there weren’t as many restrictions that impeded economic activity in the country, the statistics agency’s GDP survey coordinator, Rebeca Palis, said in a statement.

Latin America’s largest economy grew 1.2 per cent from the fourth quarter, according to data the national statistics agency released Tuesday. That was above the 0.7 per cent median forecast from economists surveyed by Broadcast, the real-time financial news service of Agencia Estado. The increase was led by a 5.7 per cent jump in the agriculture sector and included a 4.6 per cent surge in investments.

Brazil’s economy has returned to pre-pandemic levels of activity after a 4.1 per cent recession last year that was smaller than its neighbours, some of which contracted by twice as much. In large part, that was due to the generous pandemic welfare program that reached about a third of the population and buoyed activity. At the same time, President Jair Bolsonaro denounced restrictions to contain the pandemic, saying economic activity must not grind to a halt, and he influenced many local leaders and residents.

Last month's economy ministry raised its 2021 GDP outlook to 3.5 per cent, in line with market economists surveyed by the central bank, who have boosted their forecasts for six straight weeks to 3.96 per cent. Revisions came on the heels of data indicating Brazilians who needed to earn their livelihoods or were burned out on quarantine, sustained activity.

Family consumption, the largest component of demand in Brazil’s economy, stalled in the first quarter. Last month's economy ministry reflected withdrawal of pandemic welfare at year-end 2020, a struggling job market, and double-digit food inflation. Welfare was reintroduced in April at a significantly reduced level, but Brazil’s poor continue to suffer.