Brazil slashes GDP estimates and predicts deep recession

The Economy Ministry slashed GDP projections today, now predicting a contraction of 4.7 percent in 2020. If confirmed, it would be the biggest one-year skid since 1962. The latest forecasts are aligned to market expectations and represent the first time the government has admitted the drastic impact Covid-19 will have on the Brazil economy — its last estimates suggested the country would scrape growth of 0.02 percent.

The Economy Ministry expects a partial recovery in 2021, with GDP growth of 3.2 percent, followed by expansions of 2.6 percent and 2.5 percent for the following two years. 

Moreover, the impending recession is also expected to reduce Brazil’s inflation to just 1.77 percent, far below the Central Bank’s target of 4-percent.

• Go deeper: Economic woes begin. The only question is how bad it will get

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