Brazilian economy to face worst recession on record, says market

Markets expect Brazil’s GDP to plunge 5.12 percent this year, as measured by the Central Bank’s Focus Report, a weekly survey among top-rated investment firms. This was the 14th consecutive drop in expectations, falling even lower than the 4.7-percent GDP drop predicted by the Economy Ministry. If confirmed, it would also go down as Brazil’s worst economic performance since at least 1962.

As a result of the recessive effects of Covid-19 on the economy, Brazil’s benchmark inflation index is expected to reach 1.59 percent, pushing interest rates down to 2.25 percent, according to the institutions interviewed. The foreign exchange rate, on the other hand, is expected to end 2020 at BRL 5.28 to the U.S. Dollar.

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