The Organization for Economic Co-operation and Development (OECD) has improved their estimate for the Brazilian GDP in 2020, reducing the expected drop to 6.5 percent in its latest projections from a predicted 7.4-percent plunge in economic activity.
The organization sees the local economy bouncing back in 2021, but, if confirmed, the 3.6-percent growth estimate is not enough to offset the long term impacts of Covid-19.
The estimates come on the back of better projections for the global economy as a whole, due to better-than-expected performances from China and the U.S., as well as massive government responses elsewhere. The OECD now predicts the global output to contract by only 4.5 percent this year, before recovering from losses through 5 percent growth in 2021.
Still, any scenario depends on the pandemic’s development. “If the threat from Covid-19 fades more quickly than expected, improved business and consumer confidence could boost global activity sharply in 2021. But a stronger resurgence of the virus, or more stringent lockdowns are implemented they could cut 2-3 percentage points from global growth in 2021”, OECD warns.Support this coverage →