Today, we talk about the direction of the Brazilian economy. The government’s privatization list. And Brazil’s move towards vaccine clearances.
Will Q3 growth be enough to offset losses?
The government announced Brazil’s GDP results for the third quarter of 2020, with the country posting 7.7-percent growth. While this is a record jump for a single quarter since 1996, it fell below investors’ expectations of 9 percent. Furthermore, it will not be enough to offset the coronavirus crash observed earlier in the year. Despite a recent rally, activity in many sectors remains below pre-pandemic levels.
- Industry has seen six consecutive months of growth, but still accumulated losses of 6.3 percent for the year, showing signs that the recovery is losing steam.
- Sectors such as services (the backbone of the Brazilian economy), education, and private healthcare are still taking a long time to recover — which compromises the performance of other interconnected sectors, too.
Why it matters. For economists at think tank Fundação Getulio Vargas, the Brazilian economy should only return to 2019 levels (which were already underwhelming) by late 2021 or in 2022.
It could have been worse. While there is no question that the economy is in poor shape, a...