SÃO PAULO—Brazil’s economy expanded at the slowest pace in three years in 2019 as the government of President Jair Bolsonaro cut spending and investment slowed.

Gross domestic product grew 1.1% last year, after expanding 1.3% in each of the previous two years, the Brazilian Institute of Geography and Statistics, or IBGE, said Wednesday. GDP increased 0.5% in the fourth quarter, down from 0.6% in the previous three months.

It was another disappointing year for Brazil’s economy, with growth coming in at less than half the 2.5% forecast by economists at the start of 2019. The year had begun with optimism about Mr. Bolsonaro’s plan to overhaul the country’s insolvent pension system and cut the government deficit, but the outlook and the country’s low interest rates weren’t enough to overcome businesses’ reluctance to boost investment.

The president, who took office on Jan. 1 of last year, moved quickly to try to rein in outlays, making cuts to education, environmental protection and other areas and resulting in a 0.4% decline in government spending in 2019. State investment bank BNDES also slashed lending as the government hoped to spur companies to invest more.

“The private sector was too used to having government help and is still struggling to fill the gap,” said Jason Vieira, chief economist of São Paulo based brokerage Infinity Asset.