BRASILIA – O central bank already works with a retraction of Gross Domestic Product (GDP) less than 5% in 2020. In a virtual event on Monday morning, 19, the mayor’s president, Roberto Campos Neto, affirmed that the current projections already indicate a smaller decrease than previously expected, in the midst of the covid-19 pandemic. He cited the expectation of a 4.5% decline in GDP in the year.
The drop, cited by Campos Neto during a Milken Institute event, is lower than that published in the last Quarterly Inflation Report (RTI), in September this year, when the BC projected a 5% drop in GDP. At the end of June, the projection was down 6.4%.
The 4.5% decline is also below current financial market forecasts. The Focus Market Report, published on Monday morning, indicated that the median projection of market economists is a 5% drop.
In the morning, at another event, the Minister of Economy, Paulo Guedes, stated that the initial predictions were that Brazilian GDP would fall 10%. Now, market projections are between 5.5% and 5%. “But we think it will be less, a drop of about 4%”, he pointed out.
These projections are below those seen at the height of the new coronavirus pandemic. Even in the first half of the year, some financial institutions even mentioned the possibility of a double-digit decline in Brazilian GDP this year. However, Campos Neto has recalled that government programs to sustain the economy during the crisis have minimized the effects on GDP.
According to Guedes, emergency aid saved “the vital signs of the economy”. “Brazil spent 10% of GDP on this rescue operation in the pandemic. The expense was double that of the emerging ones, but without regret ”, he said. / THAÍS BARCELLOS AND EDUARDO RODRIGUES COLLABORATED