Coronavirus

Fitch: Brazilian GDP to drop 6 percent in 2020

Credit ratings agency Fitch has lowered its estimates for the Brazilian GDP in 2020, now expecting a 6-percent plunge by the end of the year, down from its previous 4-percent estimate. The coronavirus-led recession, however, should be followed by a 3.2-percent GDP increase in 2021, says the agency. 

According to the report, obtained by newspaper Valor, emerging markets — with the exception of China — are the prime culprits for the agency’s worsening expectations for the global GDP, which it expects to contract 4.6 percent this year. 

“The biggest contribution to the lower global GDP estimates comes from emerging markets, except China. Now we expect the GDP to fall by 5 percent in India and Russia, and 6 to 7 percent in Brazil and Mexico,” Fitch analysts were quoted as saying. Moreover, developed economies should experience an average 6.4 percent GDP contraction, and the U.S. and Europe will need more than two years to fully recover to pre-pandemic levels, says the report.

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Natália Scalzaretto

Natália Scalzaretto has worked for companies such as Santander Brasil and Reuters, where she covered news ranging from commodities to technology. Before joining The Brazilian Report, she worked as an editor for Trading News, the information division from the TradersClub investor community.

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